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

The dollar closed the day with an increase of 1.01%, quoted at R$ 5.142, this Thursday (9), one day after the Copom (Monetary Policy Committee) of the Central Bank decided to reduce the Selic rate by 0.25 percentage point, from 10.75% per year to 10.50% per year.

Ibovespa, B3’s main index, closed the day down 1%, at 128,188.34 points.

The value of the dollar reported daily by the press, including the UOL, refers to the commercial dollar (learn more by clicking here). For those who are going to travel and need to buy currency at exchange brokers, the reference is the tourist dollar, and the value is much higher.

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.

At the end of 2024, Lula is expected to appoint a new president and two more directors to the BC. The mandates of Roberto Campos Neto and directors Carolina Barros and Otávio Damaso are approaching an end. The authority’s director of Monetary Policy, Galípolo, who was also the right-hand man of the Minister of Finance, Fernando Haddad, would be one of the favorites for the presidency of the BC.

At Ibovespa, Eletrobras and Banco do Brasil were among the biggest losses after publishing their respective results. On the other hand, Rede D’Or was a positive highlight following an agreement with Bradesco for a new hospital network.

(With Estadão Conteúdo and Reuters)