With SELIC in Decline, Interest on Savings Accounts Will Soon Be Less than Inflation

As the SELIC rate is decreasing, savings yields may lose to inflation, which should lead investors to choose other, more risky, types of investments such as stocks and bonds.

RIO DE JANEIRO, BRAZIL - This may occur because savings yields are 70 percent of the SELIC, plus the Reference Rate (TR), which is zero.

Currently, the SELIC stands at 5.0 percent per year and the Central Bank has already signaled that the rate should drop in December to 4.5 percent per year and close 2020 at this level. As a result, savings yields will increase from 3.5 to 3.15 . . .

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