High interest rates can be an impediment to investing in the Brazilian stock market, according to a report by JPMorgan.| Photo: Gustavo Scatena/B3 disclosure

The US bank JPMorgan said, in a report this Monday (27), that the high interest rate may continue to put pressure on foreign investment in Brazil, and that maintaining the Selic rate at 13.75% at the last meeting was a bucket of cold water.

“In short, the rates [de juros] they must be the factor that will allow us to answer the question that has become more frequent in recent times: is Brazil a trap?”, wrote the analysts according to Bloomberg.

The bank went further and stated that investors have seen the moment with “pessimism” in the last five weeks, and that “prices are showing that they can always get worse”.

The pessimistic analysis is based on the performance of the Ibovespa, the main index of the B3 (São Paulo Stock Exchange), which lost the 100,000-point mark last week, and which has accumulated a 10% drop in the year, according to calculations up to the last Friday (24).

According to JPMorgan, there are no major elements that support an optimistic posture with the Brazilian stock exchange, but a sign that the new fiscal rule and a possible drop in interest rates may improve the scenario. The postponement of President Luiz Inácio Lula da Silva’s (PT) trip to China is pointed out as a way to advance the negotiations.

The new fiscal framework is pointed out by analysts as a key element for the drop in interest rates and the recovery of confidence for investments in the country. “On our recent trip to Brasília, we left with the message that the bill should not face opposition in Congress and that it could be approved relatively quickly”, says the bank.

This Monday (27), Minister Alexandre Padilha, of Institutional Relations, said that the new fiscal rule is in the final stages of negotiations and should be sent to Congress soon, for a vote “quickly”.