Brasília - The Central Bank's Monetary Policy Committee (Copom) decided yesterday (18) to maintain the annualized benchmark interest rate (Selic) at 16%. This is the fourth straight time this year that members of the committee have voted to keep the Selic unchanged at 16%. This time the vote was unanimous, based on their evalutation of the outlook for trends in inflation.

The Selic is the interest rate the government pledges to pay when it borrows money on the domestic market. The rate is determined each month by the Copom.

In calculating the Selic, the Copom takes into account various factors, among them, future inflation prospects (the next 30 days) and momentary rising or falling price tendencies in the economy (past inflation).

International economic conditions are also considered. Whether there is a glut or scarcity of money on the international market (international liquidity). Also, whether there is a lot of money in circulation on the domestic market or not and the financial requirements of government accounts (how much cash the government has available to pay its debts).

Agência Brasil
Reporter: Edla Lula
Translator: David Silberstein
08/19/2004