The Copom (Monetary Policy Committee) decided to reduce the basic interest rate (SELIC) by 0,50 percentage points, from 11,75% per year to 11,25%.
The good news is that the body indicated that the rate of interest cuts should prevail in the next meetings, according to minutes released last Tuesday (6). The expectation is to reach 10,75% in March.
“Regarding the next steps, Committee members unanimously agreed on the expectation of cuts of 0,50 percentage points in the next meetings and assessed that this is the appropriate pace to maintain contractionary monetary policy necessary for the disinflationary process”, wrote the Copom.
Copom's inflation projections stand at 3,5% for 2024 and 3,2% for 2025, in line with the expectations determined by the Focus survey, which are around 3,8% (2024) and 3,5% (2025).
The electricity sector will contribute to the country's disinflation process in view of the expectation of a green tariff flag throughout 2024.
The news of the interest rate cut is positive for the photovoltaic solar energy market, as the majority of transactions are financed. In the first half of last year, high interest rates and banks' greater discretion in granting credit harmed the sector's sales.
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