Future BC president points out continued high interest rates and dollar continues to soar

Yesterday, 2/12, the future president of the Central Bank, Gabriel Galípolo, confirmed that high interest rates will be maintained for next year at an XP event. For economist Galípolo, the maintenance of the Selic rate in major increases is a great reflection of the devaluation of the real against the dollar and a great dynamism in the Brazilian economy in these times.

The future panorama

Therefore, the monetary policy of Gabriel's administration will continue to be “more contractionary” keeping the basic interest rate, the Selic, at a high level. The future president of the BC says he is “logical” Selic maintained this standard in the face of a devalued currency, however there was a refusal to provide guidance for the next meeting of the Monetary Policy Committee (Copom).

_{Gabriel Galípolo being questioned in the Senate before being approved as president of the BC (Photo: reproduction/Getty Images Embed/Bloomberg)}

In a Focus report released last Wednesday, the Minister of Finance, Fernando Haddad, confirmed the same expectation, reforming the 0.5% Selic rate projection in the document. In December 2025, the same rate could reach 12.63%. Thus maintaining a forecast for public coffers with an increase in the nominal deficit of 8.09% of GDP.

The Purchasing Managers' Index (PMI), which is a performance indicator for the services and industry sectors, confirmed Galípolo's forecast, showing indexes that fell from 52.9 to 52.3 in October, even refusing tenths, the index maintained 50, still showing growth. The year ends with the eleventh consecutive month of growth in the domestic market as a result of export orders that indicate contraction.

The BC will not hold the dollar

The US currency continues to rise. Yesterday's trading session closed another day up 1.13% at R$6.06 — repeating another record in Brazilian history. Fiscal uncertainty continues after the package of cuts and the possibility of Donald Trump taxing the BRICS at 100%.

At the same event promoted by XP, Galípolo stated that the BC will not intervene in the dollar. Declared: “It is a discussion that will sometimes arise, that the country has US$370 billion in reserves, why not hold it close to the chest? Anyone who is in the market and is watching knows that this is not how it works”. The director stated that there is a possibility of the BC acting on the exchange rate only at the end of the year, due to a seasonal movement of sending dividends outside Brazil.

Featured photo: Roberto Campos Neto and Gabriel Galípolo, current president and director of the Central Bank (Reproduction/O Globo/Editoria de Arte/Luisa Penna)