(Corrects to article in headline to make current rate clear.
Brazil is cutting its long-term lending rate, known as TJLP, by 50 basis points effective in January.
The rate used by state development bank BNDES will be reduced to 5 percent annually from its current 5.5 percent level, Joao Pinto Rabelo Junior, the undersecretary for agricultural policy, told journalists in Brasilia.
The move was originally announced by Finance Minister Guido Mantega earlier this month.
To contact the reporters on this story: Arnaldo Galvao in Brasilia Newsroom at email@example.com;