Central Bank of Brazil Eases By More Than Forecast

June 11, 2009

In contrast to expected decisions overnight by central banks in New Zealand (no change) and South Korea (also no change), the Brazilian Selic Rate was cut by 100 basis points, 25 bps more than anticipated.  Such was the fourth reduction of 2009.  The Selic Rate started the year at 13.75% and is now 450 basis points lower at 9.25%.  However, officials said future changes will likely be smaller in size.  Negative real growth moderated 0.8% last quarter from 3.6% in 4Q08, and CPI inflation has slowed 0.7 percentage points to 5.2% year-over-year since the end-2008.

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

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