Dollar rises and passes R$5.15 with division in the Copom raising concern; Stock market falls

The dollar jumped around 1% on the afternoon of this Thursday, 9th, after a very divided decision due to the slowdown in the rate of Selic cuts the day before raised concerns about changes in the profile of the collegiate, with the Monetary Policy Committee (Copom) also highlighting in its statement very uncertain international and domestic scenarios.

At around 2:30 pm, the dollar in cash rose 1.46%, to R$5.1654 on sale. On B3, the Ibovespa fell 1.47%, to 127,577 points. See quotes.

+ Copom decision exposes BC division and divergence of directors appointed by Lula

+ With Selic at 10.50%, what are the yields on savings, Tesouro Direto and CDB?

The day before, the dollar in cash closed the day at R$5.0914 on sale, up 0.46%.

The Central Bank decided to reduce the pace of monetary easing by making a 0.25 percentage point cut in the Selic rate, to 10.50% per year, with divergence from directors appointed by President Luiz Inácio Lula da Silva, and abandoned its recommendation on the future of basic interest rates.

According to the statement, the decision was supported by president Roberto Campos Neto and directors Carolina Barros, Diogo Guillen, Otávio Damaso and Renato Gomes. Nominated by Lula, Ailton de Aquino, Gabriel Galípolo, Paulo Picchetti and Rodrigo Teixeira voted for a larger reduction, of 0.50 percentage points.

Repercussion

“Two hypotheses are raised after the decision: the first concerns an early transition between governments, which we should see towards the end of the year; The second is the most serious and raises questions about how technical the Copom’s decision is, a body that should be strictly technical”, said Étore Sanchez, from Ativa Investimentos, in a note to clients.

For Gustavo Cruz, chief strategist at RB Investimentos, the market should start pricing lower interest rates for 2025 and 2026, as it is already clear that other directors appointed by President Lula have a view that the rate should be at lower levels.

“The Copom’s decision reflects a balance between prudence and reactivity, seeking to navigate an uncertain economic environment without compromising the long-term objectives of price stability and sustainable growth. The future trajectory of Brazilian monetary policy will depend on how these global and domestic variables evolve, and whether the Central Bank will be able to adjust the Selic rate to levels that promote economic recovery without fueling inflationary pressures”, he assessed.

Even with the new cut, Brazil remains in 2nd place in the world ranking of real interest rates, below only Russia, according to a survey by Infinity Asset Management of the 40 most relevant countries in the global fixed income market.

In nominal terms, the country is in 6th place, below Argentina, Turkey, Russia, Colombia and Mexico and above South Africa, Hungary and Chile.