Do you know how it works Selic rate of the central bank in Brazil? Did you know that it's important for you to know about your changes to have greater control over your finances, especially your credit card?
It is about this subject that we will talk about in this post, but remembering that in our Digital Seguro portal, you will find information on the most varied subjects that involve your financial life: credit card, financial planning, investments, loans and much more.
Check below all the information about the Selic Rate, according to information from the Central Bank.
After all, what is this Selic rate?
SELICE means The Special System for Settlement and Custody. This term is used in the national and international banking market. According to BC, the Selic rate serves to monitor and control inflation, it also controls the issuance, purchase and sale of securities. A type of model for the cost of credit in the country.
The Selic is the basic interest rate of the economy in Brazil. In addition, it also has the role of financing operations with a duration of one day, or overnight, the guarantee is public securities.
What does this Rate Control?
In general terms, it controls investments such as savings account, CDB, LCI, LCA and LC. Especially because investors in many Brazilian bonds profit from abusive interest rates in relation to the consumer. In this way, it allows more money to enter Brazil, causing a movement in the currency.
Based on the Selic rate, the responsible sectors define the interest rate for savings, credit cards, overdraft checks and installment plans. Banks calculate the amount of interest on a loan through it.
Let's see an example:
if the Selic rate is low, the best thing to do is take out a loan or make purchases on credit. If it's high, better do nothing, save money.
However, if the Central Bank decides to reduce the Selic rate (something practically impossible), this drop may take time to reach the consumer. Especially because banks charge, in the form of interest, taxes (IOF), the costs involved, default and profit.
Final considerations – another Selic interference
It affects investments, because the investor who allocates his money in CDI funds will be influenced by the fact that most of these funds follow the Selic rate. For this reason, when the Copom decides to reduce the Selic rate, the yield will decrease in all fixed income investments that are based on the CDI, such as savings.
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