Brazil and currencies

CDI

The interest rate Brazilian banks charge each other for one-day loans. It follows the Selic very closely.

Why does it matter?

It is the most common benchmark for fixed income in Brazil: investments are often described as paying "100% of the CDI".

How do I read it?

Because it tracks the Selic, the CDI rises and falls with the Central Bank's decisions. Many people in Brazil compare the return of any investment with the CDI.

Example

An investment paying 110% of the CDI, with the CDI at 10% a year, earns about 11% a year, before taxes.