Brazil Signals at Least One More Parsimonious Key Rate Cut

Brazil’s central bank signaled it will reduce its benchmark interest rate for an eighth straight time in July after saying the economy is recovering at a “very gradual pace.”

Policy makers, who reduced the overnight rate by a half point to a record 8.5 percent last month, said today in the minutes to their May 29-30 meeting that “disinflationary” global conditions and a slower-than-anticipated recovery are limiting inflation risks. They said 2012 inflation in both their reference and market outlooks slowed since their April meeting and are around their 4.5 percent target.