after BC lower Selic, market predicts lower interest rates until the end of the year

Financial market analysts predict that the basic interest rate will decrease even more than the reduction approved by the Central Bank last week, according to the Focus Report published this Monday morning (7).

The forecast of the agents is that the year 2023 will end with a Selic rate at 11.75% (see in full), the first drop after the Monetary Policy Committee (Copom) reduced from 13.75% to 13.25% and signal new cuts in the next meetings of the year.

Until last week, the agents consulted by Focus predicted a 12% Selic rate at the end of the year. The expectation is that the minutes of the Copom meeting, which will be released on Tuesday (8), bring new indications of how the next reductions in the September, October/November and December meetings should be.

In addition to expecting a reduction in the basic interest rate by the end of the year, financial market agents also foresee a slight drop in the dollar exchange rate, from R$4.91 to R$4.90 on average. And an increase of 0.02 percentage points in GDP (Gross Domestic Product), going from 2.24% to 2.26%.

The inflation expectation remains the same in comparison with last week’s report, at 4.84% for the end of 2023. 88%, and remains at 3.50% in 2025 and 2026.