Central Bank of Brazil Kept 8.75% Selic Rate As Expected

October 22, 2009

Brazilian monetary officials did not change policy for a third straight meeting.  The policy Selic rate has been 8.75% since a 50-basis point cut announced on July 22nd.  There were also four rate reductions during the first half of 2009 totaling 450 basis points.  The prior cyclical peak of 13.75% had been in place from September 10, 2008 to January 21, 2009.  Brazilian GDP reverted to positive growth in the second quarter, rising 7.8% at an annualized rate, but activity remains below year-earlier levels.  GDP dropped 1.2% in the year to 2Q09, while industrial output fell by 7.2% in the year to August.  CPI inflation decelerated to 4.3% in September from 6.3% a year earlier.

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


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