Brazil's central bank previously cut the rate by 50 basis points in October and September, after raising the Selic rate by 25 basis points to 12.50% at the June Copom meeting this year, which at the time amounted to total tightening for the year of 175 basis points (now net tightening of 25bps). Brazil reported an annual inflation rate of 7.31% in September, compared to 7.23% in August, 6.87% in July, 6.71% in June, and 6.55% in May, and just outside the official inflation target of 4.50% +/-2% (2.5-6.5%).
The Brazilian government is forecasting economic growth this year of 4.5-5%, compared to GDP growth of 7.5% during 2010. The "BRIC" emerging market economy grew 0.8% q/q in the June quarter (1.3% in March), placing annual growth at 3.1% (4.2% in Q1). The Brazilian Real (BRL) has weakened about 12% against the US dollar so far this year, while the USDBRL exchange rate last traded around 1.81