Selic interest rate
The Selic rate is the reference interest rate for the Brazilian economy. It influences other rates, such as those used in loans, financing and investments. Setting a target for the Selic rate is the main monetary policy instrument used by the Banco Central do Brasil (BCB) to control inflation.
The Selic rate is calculated by taking the average interest rate charged on overnight operations collateralized by federal government securities traded in the local market. The BCB carries out operations in the market of government securities so that the Selic rate is in line with the target set by the Monetary Policy Committee (Copom) of the BCB
Origin of the name "Selic"
The name of the Selic rate comes from the acronym of the Special System for Settlement and Custody (Sistema Especial de Liquidação e de Custódia), which is an infrastructure of the domestic financial market managed by the BCB. In this system, federal government securities are deposited and traded.