AFP, Brasilia :
Brazil’s central bank cut its key interest rate for the first time in more than three years Wednesday as a new center-right government’s reforms fuel hopes of a recovery in Latin America’s largest economy.
The bank lowered the benchmark Selic rate by 0.25 points, to 14 percent- still one of the world’s highest.
It cited a dip in inflation and forecasts that a long recession-Brazil’s worst in a century-is nearing its end.
“The available evidence is compatible with a recent stabilization of the Brazilian economy and the possible gradual recovery of economic activity,” the bank’s monetary policy committee said in a statement.
The rate had been in a holding pattern since the last in a series of hikes in July 2015, as the bank struggled to tamp down double-digit inflation amid the implosion of an economy that was booming just six years ago.
With inflation in September now dipping to 8.48 percent and the new president, Michel Temer, embarking on economic reforms to control spending and encourage investment, the bank has shifted gears.
But Brazil’s rate is still far above Russia’s 10 percent and 6.25 percent in India, among other emerging giants.
Brazil’s central bank cut its key interest rate for the first time in more than three years Wednesday as a new center-right government’s reforms fuel hopes of a recovery in Latin America’s largest economy.
The bank lowered the benchmark Selic rate by 0.25 points, to 14 percent- still one of the world’s highest.
It cited a dip in inflation and forecasts that a long recession-Brazil’s worst in a century-is nearing its end.
“The available evidence is compatible with a recent stabilization of the Brazilian economy and the possible gradual recovery of economic activity,” the bank’s monetary policy committee said in a statement.
The rate had been in a holding pattern since the last in a series of hikes in July 2015, as the bank struggled to tamp down double-digit inflation amid the implosion of an economy that was booming just six years ago.
With inflation in September now dipping to 8.48 percent and the new president, Michel Temer, embarking on economic reforms to control spending and encourage investment, the bank has shifted gears.
But Brazil’s rate is still far above Russia’s 10 percent and 6.25 percent in India, among other emerging giants.
