Dollar rises even after Copom raises Selic and stock market has correction

Shares traded on the Brazilian Stock Exchange had a negative bias in the early hours of this Thursday (3), the day after the decision by the Central Bank’s Copom (Monetary Policy Committee) that confirmed the 1.5 percentage point increase in the country’s basic interest rates. . Now the Selic rate is 10.75% per year.

At 12:15 pm, the Ibovespa, the stock exchange’s reference, retreated 0.15%, to 11,720 points. The index therefore deepened the correction started the day before, when it retreated 1.18%, after three weeks of almost daily gains. The opposite path was taken by the exchange. The dollar rose 0.26% to R$5.29.

In theory, the rise in interest rates in Brazil tends to favor the devaluation of the American currency, as the country becomes more attractive to foreigners seeking easy gains in fixed income.

Analysts point out, however, that the Copom’s demonstration the day before indicated that interest rate stabilization is close. This reduces the expectation of perpetuation of high gains with the Selic on the rise.

“Although it has not yet signaled the end of the cycle, we believe that the Central Bank leaves open the possibility of ending the process of raising interest rates in March, with an additional tightening of 100 basis points. [1 ponto percentual]”, said Marcos Mollica, manager of Opportunity Total.

Interest on DI contracts (Interbank Deposits) retreated 0.21 percentage point this Thursday, at 11.92% per year. This rate, which is negotiated between banks, serves as a reference for financing and also reflects the credit market’s expectations about the course of the country’s interest rate in the short term.

Nicolas Borsoi, chief economist at Nova Futura, pointed out that investors are also taking advantage of recent downturns in the currency market to pocket profits. The sale of currency, consequently, puts pressure on the dollar.

The increase in the interest rate is necessary as a measure to combat inflation. More expensive credit removes money from circulation, reducing consumption and business investments.

High interest rates are also a way for Brazil to discourage capital outflows towards US Treasury bonds, where the Fed (Federal Reserve, the American central bank) is preparing to start raising its interest rate from March. Avoiding the shortage of dollars in Brazil prevents exaggerated increases in the US currency, which is also a factor in accelerating inflation.

In the United States, after a few days of recovery, the stock market opened lower. The Dow Jones, S&P 500 and Nasdaq indexes dropped 0.86%, 1.52% and 2.21%.

The negative bias was driven by the fall of Meta, owner of Facebook, Instagram and WhatsApp. The company’s shares plunged 25% after the company reported disappointing results in the fourth quarter of 2021.

In the commodities market, the rise in iron ore continued to boost Vale’s shares, which rose 0.72%.

A barrel of Brent oil fell 0.61%, at US$ 88.92 (R$ 471.44). The commodity is still at its highest price since 2014. The crisis involving an eventual invasion of Ukraine by Russia, one of the largest producers in the world, and the insistence of OPEC (organization of exporting countries) in not accelerating production put pressure on prices.

Petrobras retreated 1.52%, on a day when the news can generate fluctuations for the state company’s shares.

The main name in the polls in the race for the Presidency of the Republic, former President Luiz Inácio Lula da Silva (PT) said this Thursday that, in a possible new government, he will not keep the price of fuel linked to the dollar, as is currently the case with the prices practiced by Petrobras.

“We are not going to keep the price in dollars. I think that the shareholders of New York, the shareholders of Brazil, are entitled to receive dividends when Petrobras makes a profit, but it is important for us to know that Petrobras has to take care of the Brazilian people “, said the former president in an interview with Rede de Rádios do Paraná.

“I cannot enrich an American shareholder and impoverish the housewife who will buy a kilo of beans and pay more because of the price of gasoline.”

Petrobras’ fuel price policy was changed during the government of former president Michel Temer. Alleging that the strict price controls implemented in the government of former President Dilma Rousseff generated losses for the state-owned company and inhibited investments, a policy was adopted that follows the price of oil in the foreign market, combined with the variation of the dollar. , with frequent adjustments.

Petrobras itself reported that it is possible to pay dividends at a “much higher” level than in the past, after having reached what it considers an “optimal debt” level, said the Executive Director of Finance and Investor Relations, Rodrigo Araujo.

with Reuters