Central Bank of Brazil Cuts Interest Rate Further as Expected
August 6, 2020
The Brazilian Selic interest rate was sliced another 25 basis points as expected to 2.0%. This was its fifth reduction of 2020, following cuts of 25 basis points in February, 50 bps in March, and 75 basis points each in May and June. The rate has been lowered progressively since the final quarter of 2016 from a double digit peak. A released statement calls the environment for emerging economies like Brazil “challenging” and projects inflation below the 4% target into 2022.
The Copom believes that the current economic conditions continue to recommend an unusually strong monetary stimulus but it recognizes that, due to prudential and financial stability reasons, the remaining space for monetary policy stimulus, if it exists, should be small.
Copyright 2020, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Central Bank of Brazil
ShareThis
