One day after the Monetary Policy Committee (Copom) was divided over the pace of cuts in the Selic Rate (the economy’s basic interest rate), the financial market had a session marked by instability. The dollar rose sharply, and the stock market fell with the reduction in the rate of interest rate drops.
The commercial dollar ended this Thursday (9) sold at R$ 5.142, an increase of R$ 0.075 (+1.01%). The price opened on a high and operated above R$5.15 for almost the entire session, before slowing down towards the end of negotiations. At the high of the day, around 11 am, it reached R$5.17.
Despite Thursday’s rise, the US currency fell 0.95% in May. In 2024, the currency will appreciate by 5.96%.
In the stock market, the day was also marked by turbulence. The Ibovespa index closed at 128,188 points, down 1%. The most affected shares were those in sectors linked to consumption, such as retailers and airlines, and banks.
On a day of relative tranquility abroad, internal factors interfered in the financial market. In relation to the exchange rate, the divided meeting at the Copom, which cut the Selic by 0.25 percentage points by 5 votes to 4, was poorly received by investors.
The financial market fears that the BC will be more lenient in combating inflation after the four directors appointed by the current government voted for a 0.5 percentage point reduction. At the end of the year, the term of the current president of the body, Roberto Campos Neto, appointed by the previous government and who broke the tie for the 0.25 point cut, ends.
The reduction in the pace of cuts, on the other hand, harmed the stock market. This is because investors prefer to take advantage of the slower rate of falling interest rates to take money from the stock market and invest it in fixed income, which offers less risk. After six consecutive cuts of 0.5 points in the Selic Rate, the Copom cut just 0.25 points at its meeting on Wednesday (8).
* with information from Reuters
