Dollar jumps more than 1% and reaches R$5,142 after cut in Selic; Stock market falls

What happened

A decision divided by the slowdown in the pace of Selic cuts the day before raised concerns about changes in the profile of the collegiate. Committee highlighted in its statement a very uncertain international and domestic scenario.

The Central Bank decided the day before to cut the Selic rate by 0.25 percentage points. The cut interrupted a sequence of six consecutive reductions of half a percentage point. According to market participants, what had the biggest impact on risk appetite was the division in the decision, which for many reveals a worrying political bias.

In the view of Azimut Brasil’s chief economist, Gino Olivares, the decision added volatility to an already very challenging scenario. “Without knowing what the minority’s arguments were for this vote, it is difficult to assess the rationale for this decision; however, what is known is that in describing the scenario, in assessing the risks and, fundamentally in the perception of the need for greater caution, all committee members agreed.”

Reduction was supported by president Roberto Campos Neto and directors Carolina Barros, Diogo Guillen, Otávio Damaso and Renato Gomes. Nominated by President Luiz Inácio Lula da Silva, Ailton de Aquino, Gabriel Galípolo, Paulo Picchetti and Rodrigo Teixeira voted for a larger cut, of 0.50 percentage points.

The Minister of Finance, Fernando Haddad, stated today that he prefers to wait for the minutes of the meeting to comment. Document will be published next Tuesday. “I’m going to wait for the minutes, I think the minutes can better clarify what happened. The statement is very synthetic”, he stated upon arriving at the Treasury. Haddad spoke about Copom’s guidance for upcoming meetings, something that he did not include in this statement, for the first time since August last year. “I think the guidance was a really important thing to look at,” he said.