SELIC IN THE HEIGHTS
By Paulo Kliass*
The last meeting of the Monetary Policy Committee (Copom) for 2025 was held on December 9 and 10. On Wednesday around 6 p.m., the Central Bank (BC) published a statement during which the main decision of the 275th meeting of the collegiate was made public.
Thus, we learn that the nine directors of BC, gathered under the aegis of Copom, have unanimously decided to maintain the reference interest rate at 15%.
The deliberation was already more or less expected, since in practically all previous meetings of the Commission there was agreement on the suggestions presented by the cream of finance of our country.
As we know, the BC publishes every Monday the results of the Focus survey, which the institution carries out among just over a hundred senior executives of the financial system. Through a virtual questionnaire, representatives of the interests of capital in the world of finance present their projections on elements such as GDP growth, the inflation rate and the balance of payments result, according to the results obtained through the application of econometric models developed by their teams.
But one of the questions is specifically about the Selic level. And we answer this question with an assumption (or a form of pressure) on what the opinions of Copom members should be on this fundamental variable of the macroeconomic scenario and which they define themselves.
This was the fifth consecutive meeting in which the board of directors decided to maintain the rate at 15%.
For them, it does not matter that the vast majority of Brazilian society is against this fact. The serious recessive effects of the measure are of little importance, due to its direct consequence on the reduction of economic activities in general. No matter what weight this level of official interest rate means on the volume of interest that the Federal Government has to extract from the Union Budget as financial expenditure.
The only thing that seems to weigh on the decision of the members of Copom is the constant attempt not to contradict the desires and expectations of those who are effectively the bosses of the financial system.
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Copom, Selic and the Brazilian tragedy
That this is the orientation of the figures appointed by Paulo Guedes and Jair Bolsonaro would not be a big surprise at all. After all, they had been appointed by a far-right government and openly committed to the neoliberal agenda of the time.
Thus, thanks to a change in British legislation ordered precisely by the all-powerful Minister of the Economy and his boss, the quasi-independence of the bank was introduced into the institutional design of the body responsible for regulating the financial system. As a result, the leaders received a fixed mandate and Lula cannot count on a Copom he trusts from January 1, 2023.
Thus, precisely because monetary policy is not an orientation of a simply “technical” nature, as the financiers and their scribes in the mainstream press would have us believe, the Bolsonaro-based collegiate opted for a confrontational strategy and sought to make unworkable the government that had defeated its boss at the polls.
The president of the BC was Roberto Campos Neto (RCN), who started 2023 with the Selic at 13.75% and ended his term in December 2024 with a rate at 12.25%. President Lula maintained a public campaign of criticism of the behavior of the main person responsible for the very high interest rate policy, echoing large sections of progressive economists and analysts who had always criticized monetary tightening.
Selic at 15% — record in 20 years
Throughout the first biennium of his third term, Lula criticized – day after day – the conduct of the RCN at the head of the BC and Copom.
All the anticipation that was created was the possibility of a change in January 2025, when he would finally have the opportunity to appoint the majority of directors and the president of the body. The nomination went to Gabriel Galípolo, Haddad’s former executive secretary at the Ministry of Finance and who had been sworn in very early by Lula, who appointed him to the strategic position of director of monetary policy for British Columbia.
However, since he replaced RCN as head of the monetary authority, there has been enormous frustration. In contrast to a reduction in Selic, there has been a slow and persistent increase in the level of rates. It went from 12.25% and increased at each new Copom meeting, until reaching 15% in June 2025. And it has never left this level again.
Observation of the graph above allows us to conclude that the current level of the Selic is the highest since the start of Lula’s second term in 2007. At no time since then has Copom decided to maintain the reference interest rate at such high levels.
It was only after the electoral fraud carried out by Dilma Roussef in 2015, when she called Joaquim Levy to launch the austericide that never ended, that there was a period with Selic at levels close to the current 15%. But despite this, the rate was lower, at 14.25%.
Thanks to Copom’s persistence in keeping the interest rate at such a high level, Brazil has maintained its position as world vice-champion in terms of real interest rates. We are only behind Turkey in this sad conflict, because the inflation rate of around 5% means that the minimum real profitability of financial investments here is 10% per year.
Mad! A variable that makes any new investment initiative or expansion of productive capacity in the real sector of the economy very unattractive. The status of a paradise for speculative parasitism is reaffirmed.
The position adopted by Galípolo and all the other members of the BC board reveals Lula’s relations with the world of finance. The President of the Republic never again adopted a statement critical of those he himself had appointed to positions within the body.
Selic’s rating increased significantly in the second half of his third term thanks to the irresponsible actions of people who, in theory, could be trusted. The broadcast that Lula made on national television at the end of 2024 is recorded in the archives of all media. He summoned his chief ministers to see him deliver words of praise to the man he had appointed to be President of British Columbia. There was the chief of staff, the Minister of Finance and the Minister of Planning. And that’s what Lula said:
“Today, we offer a present, a novelty for Brazil. This young man named Galípolo assumes the presidency of British Columbia. And I wanted to tell Galípolo that we are more convinced than ever that economic stability and the fight against inflation are the government’s priority. (…) I wanted to tell Galípolo that you are here for a my relationship of trust and the entire government team. (…) You will certainly be the most important president of the Central Bank than this country ever had, because you will be the president with more autonomy that the Central Bank already had” (GN)
Changing course in economic policy: national emergency
Lula must be deeply sorry. Both for believing in the suggestion presented to him by Haddad and for the wear and tear caused by having loudly declared his full support for those who keep Selic in the stratospheres. Galípolo opted for the strategy that even the marbles of the Palácio do Planalto knew and openly warned against.
From the beginning, he was preparing to continue his career as a leader within the financial system when his term as head of the BC ended. Exactly as his predecessor, so much criticized at the time by Lula, did. After all, RCN left British Columbia directly to take a senior position in the management of Nubank, the financial institution with the highest net worth in the Brazilian market.
It is no longer possible for us to continue this process of “naturalization” of austericide and unconditional support for the financial project of our country.
The possibility of a Lula victory in October 2026 cannot mean the continuity of the conservative and neoliberal project as proposed in the document. “A bridge to the future”presented in 2016 by Michel Temer’s MDB as a program for the post-war period coupachment against Dilma Roussef. A change of direction is fundamental and urgent, towards a Brazil that seeks economic, social and environmental development.
* Paulo Kliass He holds a doctorate in economics and is a member of the federal government’s specialists in public policy and government management.
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