Selic Rate Maintenance and Impacts on the Economy

High Selic is the central theme of this article, which will analyze the recent decision of the Monetary Policy Committee (Copom) to maintain the Selic at 15% per year.

This choice reflects concerns about external instability and above-target inflation, and has significant implications for the Brazilian economy.

We will explore the impacts of this decision on various aspects, such as the economic slowdown, stock market valuations, the increased cost of credit for companies, and the attraction of investments to fixed income.

Maintaining part of the portfolio abroad will also be addressed, highlighting its importance in diversification and protection against risks.

Copom Decision of September 17, 2025

At the meeting of the Monetary Policy Committee (Central Bank) held in the September 17, 2025, the decision was to maintain the Selic rate in 15% per year.

This meeting, amid a challenging economic scenario, focused on the external and internal factors that influence the Brazilian economy.

O Copom, when justifying this measure, highlighted the instability in the international environment, a factor that puts direct pressure on emerging economies such as Brazil.

As a result, the decision to maintain Selic aims to provide a measure of protection against possible volatility that may arise in the global market.

Additionally, the choice to maintain the Selic in 15% is also a response to domestic inflation which remains higher than expected, as indicated by the expectations of Focus research, which projected inflation of 4.8% to 2025 It is 4.3% to 2026.

This decision seeks contain inflationary pressures offering more stability to the consumer and the domestic market.

O Copom thus, it exercises its policy with a view to protecting purchasing power and maintaining a favorable influence on the economy in the long term.

Economic Slowdown and Fall in Demand

The Monetary Policy Committee's (Copom) decision to maintain the Selic rate at 15% per year directly impacts the Brazilian economy, through economic slowdown and reduced aggregate demand.

When the Selic rate is high, credit becomes more expensive, discouraging consumption and investment.

Families and businesses They begin to postpone or reduce expenses, aiming to avoid increasing debt, which becomes more burdensome in a scenario of high interest rates.

Furthermore, the high Selic rate negatively affects the valuation of shares in the market, as high interest rates decrease the present value of future cash flows, making fixed income a more attractive alternative for investors.

Consequently, this decreases economic activity of companies, leading to a sharper economic slowdown.

This monetary policy strategy seeks to mitigate inflationary pressures, but involves significant sacrifices in the short term, highlighting the challenges faced by the Brazilian economy.

For more information on the impact of the Selic rate, visit See Selic economy and impact.

Valuation of Stocks on the Stock Exchange with High Interest Rates

Copom's recent decision to maintain the Selic rate at 15% per year has a significant impact on the valuation of Brazilian stocks.

This high interest rate directly increases the cost of capital for companies, reducing the present value of future cash flows, which in turn causes a reduction in fair value on the exchanges.

This dynamic reflects the need to use a higher discount rate when calculating the present value of future cash flows, as discussed in stock market analysis reports such as the one from Rico Investments.

Consequently, the perception of risk increases, making fixed income investment more attractive.

Furthermore, pressure from investors for companies to improve their financial performance is growing, as they seek alternatives that offer more solid and secure profitability.

This scenario, analyzed by experts, suggests that, even in unstable times, investors should consider international portfolio diversification to mitigate domestic volatility and protect themselves from risks associated with the local market.

Increase in the Cost of Business Credit

Maintaining the Selic rate at 15% directly impacts Brazilian companies, especially those with debts linked to variable rates.

The increase in the Selic rate makes credit more expensive, as interest rates rise, increasing financial costs for companies already facing economic challenges.

This scenario becomes critical when we consider that loans and financing are already more expensive, reducing companies' investment capacity and limiting their expansion possibilities.

Furthermore, rising interest rates place a significant burden on companies' cash flow, negatively impacting their ability to carry out daily operations.

Pressure on credit costs could lead to a pullback in growth plans and, in some cases, even the restructuring of operations to overcome imminent financial challenges, as shown by the impact addressed by high interest problem.

Therefore, the high Selic rate requires companies to rethink their financial strategies, seeking greater efficiency and new, less costly financing opportunities.

Attraction to Fixed Income and Recommendation of Diversification

Maintaining the Selic rate at a high level makes fixed-income investments more attractive compared to variable-income options, leading investors to redirect their cash flows to this modality.

This is because high interest rates guarantee safer and more predictable returns, diverting attention from the stock market, which, in a scenario of uncertainty, can present greater volatility.

Furthermore, experts recommend international diversification as a smart strategy to mitigate domestic market risks, providing additional protection against local economic fluctuations.

International Diversification as Protection

Brazilian investors can benefit significantly from international diversification.

With high interest rates in the country, allocating resources to international markets is an effective strategy for mitigating risks.

This provides exposure to strong currencies such as the dollar and euro, allowing for a natural hedge against local currency volatility.

Furthermore, by diversifying beyond Brazilian markets, investors have access to global growth sectors, such as technology and renewables, which may not be accessible in Brazil.

This strategy not only dilutes the volatility specific to the Brazilian market, but also optimizes the portfolio's potential return, while providing a buffer against local economic instability.

Therefore, it is essential to consider international diversification in any modern portfolio.

Summary of the Four Channels of Selic Impact in 15%

The recent decision by the Monetary Policy Committee to maintain the Selic rate at 15% affects the Brazilian economy through several important channels.

First, there is an economic slowdown that reduces demand and consumption.

Second, the valuation of shares on the stock exchange is impacted, as high interest rates reduce the present value of future cash flows.

Furthermore, the increase in the cost of credit for companies makes debts linked to variable rates more expensive and, finally, fixed income becomes more attractive due to the high and secure return it offers.

These effects, interconnected, directly influence the behavior of investors and consumers, changing the dynamics country's economy in a comprehensive manner.

In short, maintaining the Selic rate high directly impacts several areas of the Brazilian economy, making fixed income an attractive option.