Brazil remained at the top of the global ranking of real interest rates after the Central Bank’s Monetary Policy Committee kept the Selic benchmark rate at 13.75% a year. The rate, adjusted for inflation, increased from 8.45% in the September survey to 9.49%, according to a ranking compiled by MoneYou and Lev Intelligence.
The ranking covers 40 economies, whose average real rate is 1.28% a year. Brazil’s rate is higher than those of Turkey at 7.77%, Argentina at 6.80%, Russia at 6.57% and Colombia at 4.05%.
The real-rate calculation combines expected inflation over the next 12 months—4.99% in the Central Bank’s Focus report—with the market interest rate for a maturity 12 months ahead.
In nominal terms, Brazil ranks fourth at 13.75%. Turkey is at 36%, Argentina at 29% and Russia at 14%; Colombia, South Africa and Mexico are at 12.25%, 7.25% and 6.50%, respectively. The average nominal rate across the 40 economies is 5.51% a year.
Across a broader sample of 164 countries, 86% kept rates unchanged at their latest central bank meetings, while 9.1% raised them and 4.9% cut them. The consultancy said inflation expectations for the next 12 months were revised upward in most countries in the ranking, contributing to lower or negative real rates amid an adverse and unresolved outlook linked to the conflict in the Middle East.
Sources: Folha Mercado.