SELIC at 2.25 Percent Not Written in Stone, Says Brazilian Central Bank Director

RIO DE JANEIRO, BRAZIL – The SELIC stands at three percent per year and the Central Bank has already signaled that it will further cut it by up to 0.75 points, which would bring the interest rate down to a historic low of 2.25 percent.

Fabio Kanczuk, the Central Bank’s director of economic policy, said on Wednesday that the 2.25 percent SELIC rate is not something written in stone or something permanent that cannot be crossed.

Speaking at a virtual event promoted by the American Chamber of Commerce, he said this rate is much more tied to monetary policy focused on the output gap and risk to the neutral interest rate, than to an ‘effective lower bound’ – a level below which monetary policy loses effectiveness in boosting the economy.

Today, the SELIC stands at a yearly rate of three percent and the Central Bank has already signaled a cut of up to 0.75 points in its latest report on May 17th, which would bring basic interest rates down to a new historic low of 2.25 percent.

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