At the second Copom meeting of the year, held on March 22, it was decided to maintain the Selic rate at 13,75% — same level since October of last year.
For Sérgio Goldenstein, chief strategist at Warren Renathe question that remains is “at what moment will the rate begin its reduction movement?”.
According to the team’s analysis, monetary easing should start in June, with the Selic reaching 11% at the end of 2023 and the 9.5% at the end of the cycle.
“We assume that a relevant reduction of tax riskswhich would allow for an appreciation of the currency and a re-anchoring of inflation expectations”.
He adds that “the basic interest rate is far above the neutral rate and a good part of its lagged effects will still materialize. This will translate into a scenario of weaker activity, with a slowdown in the labor and credit markets, with this risk even greater after the ‘Americanas event’ and the turmoil in the global banking system”.
However, in view of the harsh tone of the Copom, the increase in inflation projections and the discredit in relation to the new fiscal framework, he believes that “it increased the probability that the Selic rate will remain stable throughout the year or will only start to fall in the last meetings of 2023”.
Check the details on the last Copom meeting.
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