Agribusiness between high Selic and appreciated dollar

The Federal Reserve (Fed), the central bank of the United States, reduced the basic interest rate this week by 0.25 percentage points, to the range of 4.00% to 4.25% per year, applying the first cut in nine months. In Brazil, the Monetary Policy Committee (Copom) maintained the Selic at 15% per year, reinforcing a conservative stance in the face of inflation still above the target. The distinct decision between the two countries is expected to generate mixed effects for the Brazilian agribusiness. The high Selic helps to keep the real currency valued and reduces the cost of imported inputs, but at the same time it raises the cost of rural credit, limiting investments, expansion, and modernization of production. "The high Selic helps to keep the real currency valued and reduces the cost of imported inputs, but at the same time it raises the cost of rural credit, limiting investments, expansion, and modernization of production," says Isabella Pliego, Intelligence and Strategy ...