Brazil Cuts Interest Rate by Half-Point and Puts Smaller Reductions in Play
- Central bankers lowered interest rates to 10.75% as expected
- Lula seeks more spending to boost the economy, his popularity
A shopper packs a cart of goods at a grocery store in Sao Paulo, Brazil.
Photographer: Tuane Fernandes/BloombergThis article is for subscribers only.
Brazil’s central bank lowered its interest rate by a half-point and pledged another cut of the same size for its next meeting only, opening the door to smaller drops starting in June amid underlying inflation pressure.
The bank cut the benchmark Selic to 10.75% on Wednesday, as expected by all analysts in a Bloomberg survey and in line with prior guidance. In a statement, board members wrote measures of core inflation remain above target, reiterating that monetary policy requires “serenity and moderation.”