The National Confederation of Industry (CNI) criticized the decision of the Central Bank (BC) to maintain the Selic rate at 15% per year. The decision of the Monetary Policy Committee (Copom) was published this Wednesday (12/10). In a statement, the BC said it did not anticipate a reduction in interest rates in the near future and would need to keep the Selic at this level for a “very prolonged period”.
The CNI claims that Copom’s decision ignores a series of signs in the economy that make it possible to immediately reduce Selic. According to the president of the entity, Ricardo Alban, the economic slowdown, the drop in inflation and the loss of dynamism in the labor market would be sufficient reasons to begin the cycle of lowering interest rates at Wednesday’s meeting.
“Maintaining interest rates at such a high level is excessive and harmful, because it intensifies the slowdown in economic activity, makes credit much more expensive, inhibits investment and penalizes the competitiveness of industry,” believes Alban.
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He also says that while Copom itself recognizes that the effects of high interest rates have not yet fully materialized, “there is room for a gradual change in monetary policy without compromising the convergence of inflation towards the target.”
Furthermore, the CNI argues that the BC must begin the much-needed cycle of Selic reductions at the next meeting using other monetary policy instruments, such as mandatory deposits, which have a lower budgetary cost and play a similar role to Selic in restricting the availability of credit in the financial system.
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