Expecting the impact of the coronavirus on inflation, the Brazilian Central Bank’s Monetary Policy Committee (Copom) will hold, on Tuesday (17), the second meeting of the year to define the rate Selic, currently at 4.25% per year. The spread of the disease and the instability of the financial market in the last week have led to uncertainty about the fate of basic interest rates in the economy. At the beginning of last week, most of the financial institutions consulted by the Central Bank’s bulletin predicted the maintenance of the Selic, which is at the lowest level in history.
To try to contain the dollar’s boom, the Brazilian Central Bank already injected $ 15.245 billion in resources in the foreign exchange market in March. The dollar has been rising around the world amid investors’ search for protective assets. Finally, in Brazil, the turbulent political scenario around the tax budget has served as a stimulus for an even more expensive dollar.
American Airlines decided to suspend 75% of its international flights, including all routes to Brazil, for 51 days, counting from this Monday (16). The decision comes in response to the decreasing demand for flights and amid restrictive measures adopted by the American government due to the advancement of the coronavirus. The country closed its borders to European countries and recently declared a state of national emergency.
The Amazon Biotechnology Center (CBA) wants to enable the creation of a new industrial pole in the state of Amazonas. The idea is to bring together, in a structure similar to that of the Manaus Free Trade Zone, companies that add value to products that have, as raw material, the region’s biodiversity. The Amazon Biotechnology Center has, among its main objectives, to develop new technologies based on integrated research, which will be carried out directly and indirectly by a network of regional and national laboratories.
The government’s plan to tackle the effects of the global turmoil – caused by the coronavirus outbreak and exacerbated by tension in the oil market – includes accelerating the reform agenda, actions by the Central Bank to contain the dollar and run down the credit channel and the strengthening of public banks (Caixa and Banco do Brazil) in lines of assistance to companies. In a meeting with the economic team, Guedes made it clear that he has no “plan B” for the economy and that the strategy is to follow the initial plan already outlined and take advantage of the unfavourable international winds to “deepen it”.