Brazil's Central Bank announced late Wednesday a decision to cut its basic annual interest rate (Selic) by one percentage point to 9.25 percent.

It is the first time ever that the interest rate went below 10 points. An accumulative 4.5 percentage points have been trimmed off so far in the year.

The decision was not unanimous -- six members of the Central Bank Monetary Policy Committee (Copom) gave a "yes" vote to the rate cut, while two others voted for a 0.75-percentage-point reduction.

Brazil's government said Tuesday the country's GDP contracted by 0.8 percent in the first quarter of this year, following a 3.6-percent decline in the fourth quarter of 2008, which means it has entered a technical recession.

Moreover, the Central Bank announced earlier on Wednesday that the country's inflation rate was 0.47 percent in May, higher than market expectations.

With the cut, Brazil's real annual interest rate (interest rate minus inflation rate) has dropped to 4.9 percent, which is still among the highest in the world's nations.

The Committee said that it will monitor the inflation to decide on next rate cut, but it is unlikely for any further reduction of this big margin.

Copom's next meeting is scheduled for July 21-22.

(Xinhua News Agency June 11, 2009)