The selic rate has come down significantly in recent years, from a peak reading of 19.75 percent in September 2005. The BCB hiked rates to that dramatic level amid hyperinflation, high government debt, and other short-term macroeconomic problems.
However, in recent years, the government has “cleaned house” according to Lombardi, which has allowed for a reduction in rates. The trend remains toward lower rates, with analysts expecting additional cuts this year. Lombardi expects a 0.25-basis point cut in the selic rate at the next BCB meeting on Oct. 17.
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