The Brazilian Central Bank on Wednesday cut its base interest rate for the ninth time in a row, this time by 75 basis points to 7.5%. The base rate is now close to its all-time low of 7.25% set in 2012 and 2013. The decision by the bank’s monetary committee was unanimous. The committee has been slashing the base rate since late in 2016, when it stood at 14.25%. In an accompanying statement Wednesday, the bank noted continued “favorable trends” for inflation coupled with “a gradual economic recovery.” Inflation is currently running at just 2.5%, well below the bank’s target for 2017 of 4.5%. But economic growth is still struggling and may not attain even the 1.0% mark this year. Economists said the bank’s statement could indicate more interest rate cuts to come, but not as deep as Wednesday’s cut. Most economists see the base rate settling at about 7.0%, then remaining at that level through 2018.
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