Brazil Cuts Interest Rates for 14th Time in a Row, to 12.75%

Brazilian currency, the real Brazil's Central Bank on Wednesday, March 7, cut the basic reference interest rate Selic by 25 points to 12.75%, in line with market expectations and government promises of a more flexible monetary policy.

The Monetary Policy Committee, Copom, said in a release that the decision was "unanimous" and the reduction is on target with a more flexible monetary policy process.

This was the fourteenth consecutive cut since the Central Bank begun to relax its tight approach to monetary policy in September 2005.

Market analysts anticipate that the Central Bank will continue with its policy of gradually cutting interest rates, which are among the highest in the world given the fact that inflation in Brazil has averaged 4.5 to 5.5% during the first four years of President Lula.

Copom is scheduled to meet again in mid April.

The loosening of monetary policy was an implicit promise of Lula for his second four-year mandate with the purpose of spurring the economy which since 2002 has grown at 2.6% annually, trailing the rest of Latinamerica.

In the first four years of Lula's administration an extremely orthodox monetary approach to combat inflation, appreciate the Brazilian currency and improve the debt/GDP ratio had a constricting impact in the country's growth in spite of record exports pushed by the global commodities boom.

For his second mandate the Brazilian president announced a gigantic public works investment plan, to be matched by the private sector, to ensure the Brazilian economy averages an expansion of at least 4.5% annually.

Tags:

Ads

You May Also Like

What’s Wrong with This Picture? 24% of Brazil’s Cargo Goes by Train.

The federal government wants to attract private funds for investment in expansion of the ...

Brazil Calls Summit with Arabs “Historical”

Greater cooperation in the commercial, cultural, political, and scientific-technological spheres will be the main ...

A Few Almost Guaranteed Ways to Get a Husband As Brazilians Taught Me

The biological clock is ticking and Prince Charming is a no-show? You spent Valentine’s ...

More than 3,000 Indians in Brazil Celebrate Return of Reservation Indians

Two tuxaua Indians (leaders) accused of involvement in a fire at the Raposa/Serra do ...

Brazil Says It Has No Interest in Joining the P5, the A-Bomb Club

The President of Brazil’s  National Nuclear Energy Commission (Comissão Nacional de Energia Nuclear, CNEN), ...

The Whole World Is Mad, But Brazil Has Lost Its Capacity for Indignation

During the military regime, some Brazilians abroad dared to denounce the torture occurring in ...

Brazil’s Maria Rita Gets Two Grammys at Madison Square Garden

Maria Rita, daughter of the late Elis Regina. Brazil’s most celebrated singer, has won ...

What Brazil Can Expect from Obama on Environment, Economy, Energy

The new president of the United States, Barack Obama, campaigned on a promise of ...

Brazil Sees WTO Trade Agreement a Long Way Ahead

Brazil’s principal trade negotiator Tuesday presented a pessimistic assessment of the prospects for completing ...

New President of Brazil’s PTB Party Is No Politician

Deputy Roberto Jefferson’s decision to resign the presidency of the Brazilian Labor Party (PTB) ...