Image: Freepik
The Central Bank (BC) announced the reduction of the Selic rate by 0.5 percentage points, which now operates at 13.25%. The measure put an end to the tightening phase that began in March 2021. Since August last year, the basic interest rate was 13.75% per year. The expectation now is regarding the Selic flexibility cycle, which should be implemented by the BC's Monetary Policy Committee (Copom).
Like the entire market, agribusiness, a sector that plays a significant role in the national economy, expects the readjustments of the new monetary policy to occur quickly, considering that the evolution of economic and inflationary aspects in Brazil and the world, in recent months, provides support to a less restrictive scenario.
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“In the short term, the impact of the 0.5 percentage point drop in the Selic for agribusiness will be very modest, as the measure will have no practical result on the cost of credit. What is positive is Copom's signal for a policy of further cuts in the basic interest rate. Inflation data shows relief, and the expectation is that it will continue to fall, which will stimulate investments and the growth of the national economy, in which agribusiness is the protagonist”, assesses Tirso Meirelles, vice-president of the Federation of Agriculture and Livestock of the State of São Paulo (FAESP).
Also according to Meirelles, as the Central Bank took a long time to start the cuts, keeping the Selic at a high level of 13.75%, inflation could come below the target in the coming months, which could open space for a faster and deeper inflation cycle. than currently signaled. Furthermore, the evolution of a more sober fiscal policy for the country, based on the fiscal framework that still needs to be implemented, is another point that will dictate the pace of the Central Bank's decision.
“High interest rates impact expectations and slow down the economy, directly affecting agribusiness, which needs lower rates to finance the harvest. The hope is that this will be the beginning of an interest rate cut cycle that will have major consequences for the reduction of production and operational costs in the sector, which, consequently, will result in a drop in food prices for consumers”, he reinforced. .
Although the resources of the 23/24 Harvest Plan are increasing, with special lines and lower rates, they are still insufficient to serve all producers who have to resort to the financial market.
“With a deeper cut in the Selic and a more calibrated monetary policy, access to credit is facilitated, as rural producers who seek credit with free interest rates will be able to contract operations with lower real interest rates”, highlighted Meirelles.
Another important point is that, regardless of the Selic reduction, the percentage difference between the interest rate charged by banks on loans and the interest rate paid on investments also needs to be readjusted, as, at current levels, the debts contracted by banks exaggeratedly increase. producers to finance agricultural activities.
Source: datagro
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