Clipping of news on Brazilian Culture, Law and Citizenship
27/05/2014
This article was translated by an automatic translation system, and was therefore not reviewed by people.
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The Monetary Policy Committee ( Monetary Policy Committee ) of the Central Bank starts on the afternoon of Tuesday ( 27 ) The fourth meeting of the year amid financial market expectation of maintaining the benchmark interest rate , the Selic , at the current level ( 11 % per year) . On Wednesday ( 28 ) , the second day of the meeting , the committee announces its decision on the basic rate .
After nine consecutive increases in proceedings initiated on April 17, 2013 , is expected to maintain the rate . During the period, the Selic fell from 7.25% to 11 % , raising borrowing costs and credit purchases , among other consequences .
On the first day of the Minutes, the department heads present an analysis of the domestic environment, with data on inflation , the level of economic activity , public finance , international economics, exchange rates, international reserves , the money market , among other issues .
On the second day , attending the meeting the directors and the president of the BC . The head of the Department of Studies and Research also participates , but without voting rights .
After analysis of the outlook for inflation and alternatives to define the Selic , the directors and the chairman define the rate . Once the Selic is set, the result is disclosed to the press . On Thursday of next week , the Fed releases the minutes of the meeting , with the explanation of the decision .
To Febraban ( Brazilian Federation of Banks ) , there is little doubt about the decision of the BC . " The latest inflation numbers , confirming a reduction in pressure of agricultural products , and the maintenance of the activity at a slow pace led the market to a strong consensus on the permanence of the Selic rate by 11 % per year ," says the institution in News weekly Savings Bank .
The federation adds that the Monetary Policy Committee " will ratify the high end of this cycle and reiterate the recent speech of their leaders , that will now observe the effects of the recent rise in prices for the Selic only then define its next steps ." The Selic spent nine high straight to the meeting last month.
The weekly survey of BC with financial institutions also indicates the expected end of the high cycle , at least for now . But for the last meeting of the year in December , the expectation is that the Selic is adjusted to 11.25 % per annum . In 2015 , according to this forecast , there will be higher , with the Selic reaching 12 % per year.
The Selic rate is used as a tool to influence economic activity and hence inflation . When the Monetary Policy Committee increased the Selic , the goal is to contain the heated demand , and this causes affects the prices , because higher interest rates become more expensive credit and stimulate savings.
Already when the Monetary Policy Committee reduced the basic interest rate , the trend is that credit is getting cheaper , encouraging the production and consumption , but the measure can ease control over inflation .
If the committee keep the Selic rate at the current level , it is a sign that the previous highs were sufficient to cause the expected effects on the economy . The central bank has reiterated that the effects of the high base rate accumulate and take time to appear .
The BC must find balance when making decisions about the interest rate so as to cause inflation is within the target set by the National Monetary Council . The center of the target set by the government is 4.5 % , with upper limit of 6.5 % . The expectation of financial institutions is that inflation measured by the National Consumer Price Index Ample stay at 6.47 % this year .
Source : R7
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This article was translated by an automatic translation system, and was therefore not reviewed by people.