Brazil cuts rates for the 3rd straight time
New cut drives Selic to 11% p.a
The Central Bank of Brazil decided to lower its Selic rate by 50
basis points to 11% from 11.5%. The unanimous decision was widely
expected by analysts and marks the third consecutive 50 basis
points rate cut since the 12.5% maximum. The Monetary Policy
Committee (Copom) has begun an expansive monetary policy cycle to
lower the high rates relative to inflation readings. The latest
inflations readings were close to 7%, above the top part of the
target range (6.5%). The central bank's statement, which is almost
identical to the previous rate decision, indicates that the
"moderate" rate cuts could ease the impact of a deteriorating
global economy without risking its 2012 inflation target.
During a protocol visit to Brazil, o the 1st of December, the President of the International Monetary Fund, Christine Lagarde highlighted Brazil's marcoeconomic stability. She recognized the country's effort in seeking solidity through fiscal responsability, inflation targeting and floating exchange rates.