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Brazil announces fifth consecutive cut of basic interest rate

Xinhua, April 13, 2017 Adjust font size:

Brazilian central bank's Monetary Policy Committee late Wednesday announced a unanimous decision to cut the country's annual basic interest rate Selic from 12.25 percent to 11.25 percent.

It is the fifth consecutive cut of the Selic rate, which has now returned to the level in December 2014. The one-point cut is also the sharpest since 2009.

The Selic rate, once maintained at a low level of 7.25 percent in 2012 and 2013, had been gradually increased from 2013 to 2015 and kept at a high level till 2016. Then it started to decrease again last October.

The committee said that the inflation has become milder, and the approval of the government's fiscal reforms is related to the decrease of the basic interest rate.

Brazil's inflation indicator IPCA decelerated to 0.25 percent in March, a five-year low for the month. The inflation was 0.96 percent in the first quarter, down from 2.62 percent in the same period last year.

The central bank's latest estimate of the inflation rate for the year is 4.1 percent, lower than the target of 4.5 percent. Endi