By Brazil Stock Guide – Brazil’s real interest rate has climbed to about 10% a year, one of the highest globally. The full impact of such tight monetary policy will surface only in the next two to three years, warns Rubens Menin, founder of MRV (MRVE3), the nation’s largest low-income homebuilder.
Menin says the damage is already locked in. “High borrowing costs kill everyone — some faster, others slower,” he told Estadão.
Many companies planned expansion when rates were at 2%, he noted. Now, they struggle to keep projects alive. Others have shelved investments altogether. On a recent visit to Brazil’s top firm in its sector, Menin saw idle land set aside for growth. “Borrowing at double-digit rates makes no sense,” he said.
Public debate on interest rates
Menin built his fortune during the housing boom fueled by federal programs — most notably Minha Casa Minha Vida, launched in 2009 under President Luiz Inácio Lula da Silva as a Workers’ Party (PT) flagship that gave millions of low-income Brazilians access to homeownership. He later diversified, first becoming majority shareholder of Banco Inter (BIDI11), a fast-growing digital lender, and in 2020 launching CNN Brasil, the local franchise of the U.S. network. He invested heavily in the channel during Jair Bolsonaro’s presidency, but recently lost his business partner, lobbyist João Camargo.
Menin argues that bringing down rates requires a broad mobilization similar to the 1994 Real Plan, when Brazil united to crush hyperinflation. Today, society still fails to debate interest rates with the same urgency, despite their drag on growth.
He also warns that social programs such as Bolsa Família and BPC — while essential — now cost nearly 300 billion reais a year, far above the typical budget fights in Congress over 20 or 30 billion. Without tackling spending, he said, Brazil risks a structural deficit, sticky inflation, a weaker currency and little room for rate cuts.
Resilience may not last
For now, the economy shows resilience, with low unemployment and steady activity. But Menin sees this strength as misleading, driven by the lagged effect of near-zero rates in 2020–21. “The global backdrop is complicated, and if the new fiscal framework fails to deliver, the whole picture could flip upside down,” he cautioned.