Selic rate: what is it and how does it influence your investments?

vvseoclaubbd360

The Selic Rate is the economy's basic interest rate. It influences interest rates across the country and is used by Branco Central (BC) to control inflation.  

In September 2023, the Monetary Policy Committee (Copom) reduced the Selic by another 0.5 pp, establishing it at 12.75% per year, being the second consecutive cut in the Selic rate in Brazil.

As it is directly related to some investments, it is important that you understand how it impacts the return on your investments and the Brazilian economy.

What is the Selic Rate?
Selic is the acronym for Special Settlement and Custody System.  

The system is administered by the Central Bank (BC) and federal public Brother cell phone list securities are traded there. The average rate of all these transactions (short-term loans, carried out on the same day) refers to the Selic Rate.

Selic is an important indicator, as it represents the basic interest rates for the entire Brazilian economy. Therefore, it has a direct influence on all other interest rates in the country, such as the interest rate on your credit card, for example.
  

The Monetary Policy Committee (Copom) sets the Selic rate target to ensure price stability in the country – that is, to control inflation. Every 45 days, the body meets to define whether the Selic rate remains unchanged, increases or decreases .  

The Selic is used as a monetary policy instrument by the Central Bank to control inflation. As it is the economy's basic interest rate, it also serves as a basis for investment profitability.  

Therefore, Selic movements directly impact the value and return on investments in the Brazilian market.