In an unexpectedly bold move, the Brazilian Central Bank on Wednesday slashed its base interest rate by 75 points to 13.0 percent from the previous 13.75 percent. It was the third cut in a row and the steepest reduction in five years. Two earlier reductions at the end of 2016 were limited to 25 basis points each. The decision by the bank’s monetary committee was unanimous. The move came the same day as release of 2016 annual inflation figures, showing a reduction in inflation to 6.29 percent from 10.67 percent in 2015. Inflation is widely believed to be on a downward curve and should end the year at about 4.5 percent. Meanwhile, Brazil’s economy is still stalled in a stubborn, two-year recession. Lower interest rates should help boost investment and consumer buying, according to economists.
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