Banco Central do Brazil (BCB), Brazil's central bank, uses a special

clearance from the escrow rate system for performing open market operations in execution

of monetary policy. The interest rate target is known as the Selic rate. In October 15, it sets

its interest rate target at 14.25 percent pursuing monetary restriction initiated in 2013, when

its target rate was 7.25 percent. What impact do you think such changes in central bank

interest rate would have on the prices of Brazilian bonds? What may be the objective of the

BCB?

Answer rating: 100% (QA)

The impact of changes in the central bank interest rate specifically the Selic rate in Brazil on the prices of Brazilian bonds can be analyzed through ... View the full answer