The Copom (Monetary Policy Committee) of the BC (Central Bank) followed expectations and decided to raise the basic interest rate for the fourth consecutive meeting. As in December, the increase was 1 pp (percentage point), to 13,25%, which is the highest level since September 2023.
In a statement, the agency reports that external uncertainties, mainly in the United States, raise doubts about the position of the Federal Reserve (Fed, US Federal Reserve).
In relation to Brazil, the text highlights that the national economy is going through a moment of uncertainty regarding the containment of public spending and a possible loss of control of inflation.
“The perception of economic agents regarding the fiscal regime and debt sustainability continues to have a significant impact on asset prices and agents’ expectations,” the statement highlights.
Regarding the next meetings, Copom confirmed that it will raise the rate Selic by 1 pp at the March meeting, raising interest rates to 14,25% per year.
Interest rate scenario at 14,25% in March: what are the impacts for the solar sector?
Selic rate
The Selic rate is the BC's main instrument for controlling inflation – since when it is low, Copom reduces the interest rate to stimulate consumption and stimulate the economy.
On the other hand, when inflation is high, as is the case in the current scenario, the agency raises the Selic rate to restrict consumption and, consequently, reduce pressure on prices, such as food, fuel and energy.
The Central Bank only considers reducing it when it is certain that prices are under control and the risk of high inflation is eliminated, which is not the current case.
As a rule, a significant increase in interest rates is detrimental to the development of any country, even though it is a necessary measure to control inflation.
From an investor's point of view, the Selic rate serves as a parameter to assess the viability of their investments. This, in turn, negatively impacts the value of companies and businesses in general.
Impacts on the solar sector
In the solar energy sector, the increase in the Selic rate impacts, above all, the cost of financing photovoltaic projects, which end up becoming more expensive for consumers who are unable to purchase the technology with cash payment.
With financing becoming more expensive, customers looking to invest in solar plants may find less favorable conditions, which could reduce demand for new installations.
Furthermore, rising financing costs can affect the profitability of projects, making them less attractive to investors.
Copom Meetings
Copom is the body of the Central Bank, formed by its president and directors, who define the level of the Selic rate every 45 days. The objective is to ensure that the country's monetary policy achieves its objectives efficiently.
Once the basic interest rate has been defined, the Central Bank acts daily through open market operations – buying and selling federal public bonds to keep interest rates close to the value defined at the meeting and prevent inflation from getting out of control.
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