By Central Bank News
The central bank of Brazil cut its benchmark Selic rate by 25 basis points to 7.25 percent, a move that was expected by some economists, with the bank citing a challenging international economy.
Banco Central do Brasil’s decision to cut its main interest rate for a seventh time this year and its tenth cut in a row, divided the Monetary Policy Committee, with five committee members voting to cut the rate and three voting to keep it unchanged.
Inflation in Brazil rose to an annual rate of 5.28 percent in September from 5.24 percent in August, prompting some economists to forecast that the central bank would keep rates unchanged. The central bank targets inflation of 4.5 percent, plus/minus 2 percentage points.
But other economists were expecting a cut due to weakening economic growth. Brazil’s Gross Domestic Product rose by only 0.50 percent in the second quarter from the same quarter last year, down from an annual rate of 0.8 percent in the first and 1.4 percent in the fourth.
The central bank has now cut its key interest rate by 375 basis points this year.
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