Brazil cuts basic interest rate to record low

July 12th, 2012 - 1:45 pm ICT by IANS  

Rio de Janeiro, July 12 (IANS) Brazil’s central bank cut its benchmark Selic interest rate Wednesday by half a percentage point to a record low of 8 percent in the eighth consecutive rate cut this year.

The country is currently running a low risk of inflation, allowing for room for more rate easing, said the Monetary Policy Committee of Brazil, which has cut the basic interest rate by 3 percentage points since the beginning of the year, reported Xinhua.

The reduction came as expected by the market and at a time when the government is struggling to revive the country’s flagging economy.

Brazil’s industrial output fell 1.8 percent last year, prompting expectations of a further cut of 0.75 percentage points.

The government has rolled out favourable policies, including lower taxes, cheaper credit and rate cuts to stimulate the domestic economy.

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