Wednesday, July 11, 2012

Brazil central bank cuts rate by 50 bps to 8.0%

    The central bank of Brazil cut its benchmark Selic rate by 50 basis points to 8.0 percent, as expected, due to limited risks of higher inflation.
    The Banco Central do Brazil also said in a statement that given the fragile global economy, the external environment was disinflationary.
    "Thus, in response to the process of adjusting monetary conditions, the Committee decided unanimously to reduce the Selic rate to 8.00% pa, without bias," the bank said after a meeting of its Monetary Policy Committee.
    The Brazilian central bank has cut it key rate eight times this year for a total reduction of 3 percentage points due to a slowing economy. 

        The interest rate target set by the central bank is the target for the Selic rate, the interest rate for overnight interbank loans collateralized by government bonds. The monetary policy committee can also establish a policy bias at its regular meetings. A bias to ease or tighten authorizes the bank's governor to alter the  interest rate target in the direction of the bias at anytime between regular policy meetings.


Post a Comment