• Categories
  • Archives

Brazil’s Interest Rate Hike Pleases No One

Brazil’s  Monetary Policy Committee (Copom) has announced late yesterday another increase in the Brazilian interest rate (Selic) from 18.25% to 18.75%. This is the sixth consecutive increase since September 2004.

The decision was taken unanimously by the committee,  “giving continuity to the process of adjustment of the basic interest rate begun in the September 2004 meeting,” according to the note issued by Copom. Since September, the Selic rate has accumulated an increase of 2.75 points. 
 
Rio de Janeiro’s Industries Federation (Firjan) criticized the measure and said that Brazil should expect a reduction in the rhythm of growth of the economy due to the increase.  
 
For Firjan, this new boost in interest rates is ill advised in a moment in which there is more credit available and longer term financing can be more easily obtained.


Firjan believes that the Copom should have waited to see how previous increases adopted by the Committee would affect inflation.


The president of the Trade Federation of the State of Rio de Janeiro (Fecomércio/RJ), Orlando Diniz, also condemned the monetary authorities’ action.  


Diniz commented that there is no truth to the allegations that there is a threat of pressure brought in by demand. According to him what happened to the Brazilian economy in 2004 was merely a catching up after losses from the past.


The President of Fecomércio/RJ believes that the recovery process of some economy sectors, in particular the non-durable goods sector, “might suffer heavily due to the new interest rates increase. According to him, micro and small businesses will suffer the most.


The Center of Industries of the State of São Paulo (Ciesp), considered the Copom decision a “continuity of an austerity policy, that dampens productive investment and job creation.”


In  a note issued to the press, the director of Ciesp’s Economy Department, Boris Tabacof, said that economic indexes point to a deceleration of business activity and stressed that “the same policy that punishes the industry is ineffective for the control of monitored prices, which answer for 30% of the inflation.” 
 
ABr

Tags:

  • Show Comments (1)

  • Guest

    How is it that as soon as the brazilian economy strats to move forward the Government always steps in and tries to stop this progress under the pretext of stopping inflation.How is it that stopping growth is good for a country? If high interest rates are so good how is that the US Japan and all of Europe have the lowest interset rates in history.Brazil will always remain a banana republic as long as it has such incompetent leaders running the country

Your email address will not be published. Required fields are marked *

comment *

  • name *

  • email *

  • website *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Ads

You May Also Like

Summer Camp with Capoeira and Brazilian Zest

Baltimore’s first Brazilian Carnival Summer Camp opens June 27th and will feature Capoeira, the ...

Stroke Takes Brazilian Maestro Moacir Santos Away

Brazilian composer and arranger Moacir Santos died Sunday, August 6, in Los Angeles where ...

Despite Volume Fall Brazil’s Ironworks Industry on the Rise

Despite a worldwide reduction in the volume of mergers and acquisitions in the ironworks ...

Brazil Sugar and Ethanol Makers Claim They’re Doing Everything Right

In Brazil, UNICA, the ethanol/sugar mill owners trade union, says 2009 was a terrible ...

Brazil’s UNESP Gets LatAm’s Most Powerful Computer Network

Brazil's UNESP (São Paulo State University) will be installing in the coming weeks its ...

President Lula Asked to Leave Brazil After He Pans National Soccer Team

The coach of Brazil's soccer national team, Dunga, and some Brazil players were not ...

Brazilian Congress Tables Two Bills Decriminalizing Abortion

Two bills to decriminalize abortion in Brazil were defeated for the third time in ...

Arabs Now Want Brazil Buying from Them

Increasing and balancing bilateral trade between the Arabs and the state of Minas Gerais ...

This Lebanese-Brazilian Built a Little Food Empire

It is 10 o’clock in the morning. Aldemir Abdala runs from one side to ...

Best-seller Books, Plays and Movies

By Brazzil Magazine Alice Através do Espelho (Alice Through the Looking Glass)—Based on Lewis ...