The SELIC rate is adjusted by +50bp, in line with expectations

Summary

The Monetary Policy Committee (COPOM) decided to hike the SELIC interest rate by +50bp, to 12.25%. This further tightening of monetary conditions, which was in line with expectations, occurs at the same moment the government is reversing the expansive tone of fiscal policy aiming at both recovering the credibility lost in the past few years and addressing some macroeconomic distortions such as high inflation. We expect a final +25bp adjustment in the next monetary policy meeting in March, even though the communique of the decision revealed that the door is open for another +50bp adjustment.

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