O Cup (Monetary Policy Committee) of the Central Bank decided, on the night of this Wednesday (06), to increase the basic interest rate by 0,5 pp (percentage point), raising the Selic at 11,25% per year – the same level in effect between February and March of this year.
The decision is in line with what has been speculated and projected by the financial market, and this is the second consecutive increase in the interest rate. In September, the Committee had already raised the Selic from 10,50% to 10,75%.
The main reason that led the Central Bank to raise interest rates in the country again is the fiscal risk, since recent signals from the Federal Government have worsened expectations about public debt control.
Furthermore, the American election put pressure on the dollar to higher levels, which also forced the Central Bank to raise interest rates in the country.
Impacts on the solar energy sector
In the solar energy sector, the increase in the Selic rate impacts, above all, the cost of financing projects, which end up becoming more expensive for those who cannot purchase the technology with payment in cash, as explained by Bernardo Marangon, director of Prime Energy, a company controlled by the Shell Group.
“The increase in the Selic rate directly impacts all other interest rates on the market, including those linked to the CDI. This increases the cost of debt for companies that have loans linked to these rates,” he explains.
The professional highlights that the main objective of increasing the Selic rate is to contain inflation, slowing down the economy to avoid inflationary pressures resulting from excessive economic growth.
In this scenario, he highlights that integrators and companies in the solar energy sector may face additional challenges.
“With the increase in financing costs, customers looking to invest in solar projects may find less favorable conditions, which could reduce demand for new installations. In addition, the increase in financing costs could affect the profitability of projects, making them less attractive to investors,” Marangon points out.
Copom Meetings
Copom is the body of the Central Bank, formed by its president and directors, who define the level of the Selic rate every 45 days. The objective is to ensure that the country's monetary policy achieves its objectives efficiently.
Meetings typically take place on two consecutive days and the calendar for a given year is published by June of the previous year.
Once the basic interest rate has been defined, the Central Bank acts daily through open market operations – buying and selling federal government bonds to keep the interest rate close to the value defined at the meeting.
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