Brazilian Selic Rate Left at 8.75% As Expected

December 10, 2009

The Central Bank of Brazil left its benchmark Selic rate at 8.75% where such has been since a 50 basis point cut on July 22nd.  There were four prior cuts in the first half of 2009 of 100 bps in January, 150 bps in March, and 100 bps each in April and June.  Altogether, rates were lowered from 13.75% to 8.75%.  A statement from the policy committee Copom spoke of conflicting pressures of previous monetary stimulus and considerable remaining slack in Brazil’s economy, and officials concluded that inflation will remain within the inflation target of 4.5% in the target period and that growth will be positive.  Consumer prices rose 4.2% in the year to November, same as in October, and GDP expanded in the second quarter but was still lower than a year earlier.

Copyright Larry Greenberg 2009.  All rights reserved.  No secondary distribution without express permission.

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