{"id":92199,"date":"2024-12-12T11:09:16","date_gmt":"2024-12-12T14:09:16","guid":{"rendered":"https:\/\/murray.adv.br\/?p=92199"},"modified":"2024-12-12T11:09:19","modified_gmt":"2024-12-12T14:09:19","slug":"brazils-central-bank-speeds-up-tightening-raising-rates-by-100bp","status":"publish","type":"post","link":"https:\/\/murray.adv.br\/en\/brazils-central-bank-speeds-up-tightening-raising-rates-by-100bp\/","title":{"rendered":"Brazil\u2019s Central Bank speeds up tightening, raising rates by 100bp"},"content":{"rendered":"\n<h6 class=\"wp-block-heading has-text-align-center\"><em><strong>Citing an adverse scenario, the Monetary Policy Committee unanimously raised the Selic policy rate to 12.25%<\/strong><\/em><\/h6>\n\n\n\n<p><\/p>\n\n\n\n<p><\/p>\n\n\n\n<p><\/p>\n\n\n\n<p><\/p>\n\n\n\n<p><\/p>\n\n\n\n<p>12\/12\/2024 <\/p>\n\n\n\n<p>The Monetary Policy Committee (COPOM) accelerated its tightening pace, raising the benchmark Selic rate from 11.25% to 12.25%. Citing a more adverse and less uncertain scenario, the committee also signaled two additional hikes of 100 basis points each for the upcoming meetings, \u201ccontingent on the expected scenario being confirmed.\u201d<\/p>\n\n\n\n<p>With this guidance, the newly configured COPOM in 2025, chaired by Gabriel Gal\u00edpolo and with seven of its nine seats occupied by appointees of the current government, could raise the Selic rate to 14.25% by March. This level would be the highest since August 2016. Wednesday\u2019s decision was unanimous.<\/p>\n\n\n\n<p>The COPOM said the total magnitude of the tightening cycle will depend on its \u201cfirm commitment\u201d to anchoring inflation to the target and \u201cwill depend on the evolution of inflation dynamics.\u201d The continuous inflation target from 2025 onwards is 3% per year, with a tolerance band of 150 basis points in either direction.<\/p>\n\n\n\n<p>The committee cited factors influencing the cycle\u2019s magnitude, including the evolution of inflation components most sensitive to economic activity and monetary policy. Additionally, the statement highlighted inflation projections, inflation expectations, economic slack (the output gap), and the balance of risks\u2014factors that could lead inflation to deviate from the Central Bank\u2019s forecasts.<\/p>\n\n\n\n<p>On economic activity, the COPOM noted the ongoing \u201cdynamism\u201d in the labor market. It pointed out that the 0.9% GDP growth in the third quarter indicated a further narrowing of the output gap. A positive output gap, already a factor in previous meetings, suggests that economic activity is above potential, potentially fueling inflation.<\/p>\n\n\n\n<p>The committee also emphasized that there has been additional de-anchoring of inflation expectations and upward revisions to its projections. The COPOM now forecasts the IPCA inflation index at 4.9% in 2024, 4.5% in 2025, and 4% in the second quarter of 2026. Meanwhile, the Central Bank\u2019s Focus survey, which aggregates market expectations, shows a median inflation forecast of 4.84% for this year, 4.59% for 2025, and 4% for 2026. The second quarter of 2026 is currently the relevant horizon for monetary policy.<\/p>\n\n\n\n<p>The combination of de-anchored expectations, stronger-than-expected activity, and a wider output gap requires \u201can even more contractionary monetary policy,\u201d according to the COPOM. Regarding the balance of risks, the committee noted that risks have materialized, and the scenario is now \u201cless uncertain and more adverse\u201d than in the previous meeting in November. It also highlighted a persistent upward bias in the balance of risks.<\/p>\n\n\n\n<p>The Central Bank assessed that market reactions to the government\u2019s fiscal measures significantly impacted asset prices and expectations, particularly regarding risk premiums, inflation expectations, and the exchange rate. These factors, the committee argued, contribute to \u201ca more adverse inflationary dynamic.\u201d<\/p>\n\n\n\n<p>In late November, the government announced fiscal adjustment measures expected to have a R$70 billion impact over the next two years. After the measures were disclosed, the exchange rate per U.S. dollar breached the R$6 level. On Monday, however, the U.S. currency closed at R$5.9682.<\/p>\n\n\n\n<p>LCA Consultores noted that the tone of the COPOM statement was the most conservative since 2016, according to an index developed by the firm. \u201cIt was the most \u2018hawkish\u2019 statement since communications reached a minimum number of sentences for analysis,\u201d said economist Bruno Imaizumi from LCA. \u201cThis is consistent with the surprising 300 basis points already in the pipeline. It aims to fully dispel the doubts that the COPOM itself created in May.\u201d<\/p>\n\n\n\n<p>Mr. Imaizumi referred to the May decision, when the committee was split. Four members appointed by the current government voted for a sharper rate cut, while the other five, already on the Central Bank\u2019s board, favored a smaller 25-basis-point cut.<\/p>\n\n\n\n<p>When asked about the COPOM\u2019s decision, Finance Minister Fernando Haddad said it was surprising on one hand but \u201chad already been priced in\u201d on the other. He added that he would review the statement and consult with others after the quiet period.<\/p>\n\n\n\n<p>(<em>Victor Rezende contributed reporting.<\/em>)<\/p>\n\n\n\n<p><\/p>\n\n\n\n<p>*By\u00a0Gabriel Sinohara e\u00a0Alex Ribeiro<\/p>\n\n\n\n<p>Source: Valor International<\/p>\n\n\n\n<figure class=\"wp-block-embed\"><div class=\"wp-block-embed__wrapper\">\nhttps:\/\/valorinternational.globo.com\/\n<\/div><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>Citing an adverse scenario, the Monetary Policy Committee unanimously raised the Selic policy rate to 12.25% 12\/12\/2024 The Monetary Policy Committee (COPOM) accelerated its tightening pace, raising the benchmark Selic rate from 11.25% to 12.25%. Citing a more adverse and less uncertain scenario, the committee also signaled two additional hikes of 100 basis points each [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8106],"tags":[23772,25711],"class_list":["post-92199","post","type-post","status-publish","format-standard","hentry","category-murray-news","tag-brazils-central-bank","tag-raising-rates-by-100bp"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.0 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Brazil\u2019s Central Bank speeds up tightening, raising rates by 100bp - Murray Advogados<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/murray.adv.br\/en\/brazils-central-bank-speeds-up-tightening-raising-rates-by-100bp\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Brazil\u2019s Central Bank speeds up tightening, raising rates by 100bp - Murray Advogados\" \/>\n<meta property=\"og:description\" content=\"Citing an adverse scenario, the Monetary Policy Committee unanimously raised the Selic policy rate to 12.25% 12\/12\/2024 The Monetary Policy Committee (COPOM) accelerated its tightening pace, raising the benchmark Selic rate from 11.25% to 12.25%. Citing a more adverse and less uncertain scenario, the committee also signaled two additional hikes of 100 basis points each [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/murray.adv.br\/en\/brazils-central-bank-speeds-up-tightening-raising-rates-by-100bp\/\" \/>\n<meta property=\"og:site_name\" content=\"Murray Advogados\" \/>\n<meta property=\"article:published_time\" content=\"2024-12-12T14:09:16+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-12-12T14:09:19+00:00\" \/>\n<meta name=\"author\" content=\"Gelcy Bueno\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Gelcy Bueno\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/murray.adv.br\/en\/brazils-central-bank-speeds-up-tightening-raising-rates-by-100bp\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/murray.adv.br\/en\/brazils-central-bank-speeds-up-tightening-raising-rates-by-100bp\/\"},\"author\":{\"name\":\"Gelcy Bueno\",\"@id\":\"https:\/\/murray.adv.br\/en\/#\/schema\/person\/dd0d0bea46c2436124555d18c1a0d52e\"},\"headline\":\"Brazil\u2019s Central Bank speeds up tightening, raising rates by 100bp\",\"datePublished\":\"2024-12-12T14:09:16+00:00\",\"dateModified\":\"2024-12-12T14:09:19+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/murray.adv.br\/en\/brazils-central-bank-speeds-up-tightening-raising-rates-by-100bp\/\"},\"wordCount\":671,\"keywords\":[\"Brazil\u2019s Central Bank\",\"raising rates by 100bp\"],\"articleSection\":[\"Murray News\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/murray.adv.br\/en\/brazils-central-bank-speeds-up-tightening-raising-rates-by-100bp\/\",\"url\":\"https:\/\/murray.adv.br\/en\/brazils-central-bank-speeds-up-tightening-raising-rates-by-100bp\/\",\"name\":\"Brazil\u2019s Central Bank speeds up tightening, raising rates by 100bp - Murray Advogados\",\"isPartOf\":{\"@id\":\"https:\/\/murray.adv.br\/en\/#website\"},\"datePublished\":\"2024-12-12T14:09:16+00:00\",\"dateModified\":\"2024-12-12T14:09:19+00:00\",\"author\":{\"@id\":\"https:\/\/murray.adv.br\/en\/#\/schema\/person\/dd0d0bea46c2436124555d18c1a0d52e\"},\"breadcrumb\":{\"@id\":\"https:\/\/murray.adv.br\/en\/brazils-central-bank-speeds-up-tightening-raising-rates-by-100bp\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/murray.adv.br\/en\/brazils-central-bank-speeds-up-tightening-raising-rates-by-100bp\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/murray.adv.br\/en\/brazils-central-bank-speeds-up-tightening-raising-rates-by-100bp\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"In\u00edcio\",\"item\":\"https:\/\/murray.adv.br\/en\/home\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Brazil\u2019s Central Bank speeds up tightening, raising rates by 100bp\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/murray.adv.br\/en\/#website\",\"url\":\"https:\/\/murray.adv.br\/en\/\",\"name\":\"Murray Advogados\",\"description\":\"PLG International Lawyers\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/murray.adv.br\/en\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/murray.adv.br\/en\/#\/schema\/person\/dd0d0bea46c2436124555d18c1a0d52e\",\"name\":\"Gelcy Bueno\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/murray.adv.br\/en\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/1ef2acfe966d6deacdeccd2a24ea89192c41fd05fc60e57b79021358a47f5641?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/1ef2acfe966d6deacdeccd2a24ea89192c41fd05fc60e57b79021358a47f5641?s=96&d=mm&r=g\",\"caption\":\"Gelcy Bueno\"},\"url\":\"https:\/\/murray.adv.br\/en\/author\/news\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Brazil\u2019s Central Bank speeds up tightening, raising rates by 100bp - Murray Advogados","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/murray.adv.br\/en\/brazils-central-bank-speeds-up-tightening-raising-rates-by-100bp\/","og_locale":"en_US","og_type":"article","og_title":"Brazil\u2019s Central Bank speeds up tightening, raising rates by 100bp - Murray Advogados","og_description":"Citing an adverse scenario, the Monetary Policy Committee unanimously raised the Selic policy rate to 12.25% 12\/12\/2024 The Monetary Policy Committee (COPOM) accelerated its tightening pace, raising the benchmark Selic rate from 11.25% to 12.25%. Citing a more adverse and less uncertain scenario, the committee also signaled two additional hikes of 100 basis points each [&hellip;]","og_url":"https:\/\/murray.adv.br\/en\/brazils-central-bank-speeds-up-tightening-raising-rates-by-100bp\/","og_site_name":"Murray Advogados","article_published_time":"2024-12-12T14:09:16+00:00","article_modified_time":"2024-12-12T14:09:19+00:00","author":"Gelcy Bueno","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Gelcy Bueno","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/murray.adv.br\/en\/brazils-central-bank-speeds-up-tightening-raising-rates-by-100bp\/#article","isPartOf":{"@id":"https:\/\/murray.adv.br\/en\/brazils-central-bank-speeds-up-tightening-raising-rates-by-100bp\/"},"author":{"name":"Gelcy Bueno","@id":"https:\/\/murray.adv.br\/en\/#\/schema\/person\/dd0d0bea46c2436124555d18c1a0d52e"},"headline":"Brazil\u2019s Central Bank speeds up tightening, raising rates by 100bp","datePublished":"2024-12-12T14:09:16+00:00","dateModified":"2024-12-12T14:09:19+00:00","mainEntityOfPage":{"@id":"https:\/\/murray.adv.br\/en\/brazils-central-bank-speeds-up-tightening-raising-rates-by-100bp\/"},"wordCount":671,"keywords":["Brazil\u2019s Central Bank","raising rates by 100bp"],"articleSection":["Murray News"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/murray.adv.br\/en\/brazils-central-bank-speeds-up-tightening-raising-rates-by-100bp\/","url":"https:\/\/murray.adv.br\/en\/brazils-central-bank-speeds-up-tightening-raising-rates-by-100bp\/","name":"Brazil\u2019s Central Bank speeds up tightening, raising rates by 100bp - Murray Advogados","isPartOf":{"@id":"https:\/\/murray.adv.br\/en\/#website"},"datePublished":"2024-12-12T14:09:16+00:00","dateModified":"2024-12-12T14:09:19+00:00","author":{"@id":"https:\/\/murray.adv.br\/en\/#\/schema\/person\/dd0d0bea46c2436124555d18c1a0d52e"},"breadcrumb":{"@id":"https:\/\/murray.adv.br\/en\/brazils-central-bank-speeds-up-tightening-raising-rates-by-100bp\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/murray.adv.br\/en\/brazils-central-bank-speeds-up-tightening-raising-rates-by-100bp\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/murray.adv.br\/en\/brazils-central-bank-speeds-up-tightening-raising-rates-by-100bp\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"In\u00edcio","item":"https:\/\/murray.adv.br\/en\/home\/"},{"@type":"ListItem","position":2,"name":"Brazil\u2019s Central Bank speeds up tightening, raising rates by 100bp"}]},{"@type":"WebSite","@id":"https:\/\/murray.adv.br\/en\/#website","url":"https:\/\/murray.adv.br\/en\/","name":"Murray Advogados","description":"PLG International Lawyers","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/murray.adv.br\/en\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/murray.adv.br\/en\/#\/schema\/person\/dd0d0bea46c2436124555d18c1a0d52e","name":"Gelcy Bueno","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/murray.adv.br\/en\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/1ef2acfe966d6deacdeccd2a24ea89192c41fd05fc60e57b79021358a47f5641?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/1ef2acfe966d6deacdeccd2a24ea89192c41fd05fc60e57b79021358a47f5641?s=96&d=mm&r=g","caption":"Gelcy Bueno"},"url":"https:\/\/murray.adv.br\/en\/author\/news\/"}]}},"_links":{"self":[{"href":"https:\/\/murray.adv.br\/en\/wp-json\/wp\/v2\/posts\/92199","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/murray.adv.br\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/murray.adv.br\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/murray.adv.br\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/murray.adv.br\/en\/wp-json\/wp\/v2\/comments?post=92199"}],"version-history":[{"count":1,"href":"https:\/\/murray.adv.br\/en\/wp-json\/wp\/v2\/posts\/92199\/revisions"}],"predecessor-version":[{"id":92200,"href":"https:\/\/murray.adv.br\/en\/wp-json\/wp\/v2\/posts\/92199\/revisions\/92200"}],"wp:attachment":[{"href":"https:\/\/murray.adv.br\/en\/wp-json\/wp\/v2\/media?parent=92199"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/murray.adv.br\/en\/wp-json\/wp\/v2\/categories?post=92199"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/murray.adv.br\/en\/wp-json\/wp\/v2\/tags?post=92199"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}