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Brazil's central bank cut interest rates for the first time in four years to stimulate economic reco
2018/4/24
Wednesday, Brazil's central bank to cut interest rates 25 basis points, which is the first rate cut in four years, opening a policy easing cycle, aimed at Brazil's economy pulled out more than a century to the most serious recession.
The central bank's Monetary Policy Committee (Copom) unanimously adopted a policy decision, the benchmark interest rate down to 14% Selic, that will open the "moderate and gradual easing cycle.
But the central bank said in a statement after the decision, if future inflation accelerated decline, and Congress approved austerity measures, may choose more rate cuts.
Brazil's central bank said, the magnitude of the loose monetary policy and the future may accelerate the pace of cut interest rates, depending on the implementation of the monetary policy, the situation is conducive to enhancing the evolution of the confidence of inflation target."
Low interest rates will help President Barack Temel to strengthen the momentum of economic recovery. The current Brazil high unemployment, industrial and service sector activity continued to decline, dampened for economy later this year to pick up the confidence in the economic recovery situation is still whirling.
Some analysts believe that the central bank hinted that it will be more active in the longer period to implement more measures to cut interest rates.
"We believe that, despite the central bank today seem more cautious, but there is ample reason to cut interest rates 50 basis points again at the next meeting," said St Paul's Haitong economic analyst in the research report.
Most analysts are expected to cut interest rates again, many of them bet the central bank will cut interest rates more aggressively by 50 basis points.
Brazil's central bank last year to maintain the benchmark interest rate unchanged. Brazil is one of the countries with the highest interest rates among the group of 20 (G20).
However, inflation slowed, and Congress approved a preliminary key austerity proposals, the central bank's new president Gold Fein (Ilan Goldfajn) have sufficient reason to cut interest rates.
This or will boost investor confidence; earlier this year, the political turmoil in Brazil led to the impeachment of former president Rousseff to step down, the domestic economy has suffered heavy losses.
The central bank's Monetary Policy Committee (Copom) unanimously adopted a policy decision, the benchmark interest rate down to 14% Selic, that will open the "moderate and gradual easing cycle.
But the central bank said in a statement after the decision, if future inflation accelerated decline, and Congress approved austerity measures, may choose more rate cuts.
Brazil's central bank said, the magnitude of the loose monetary policy and the future may accelerate the pace of cut interest rates, depending on the implementation of the monetary policy, the situation is conducive to enhancing the evolution of the confidence of inflation target."
Low interest rates will help President Barack Temel to strengthen the momentum of economic recovery. The current Brazil high unemployment, industrial and service sector activity continued to decline, dampened for economy later this year to pick up the confidence in the economic recovery situation is still whirling.
Some analysts believe that the central bank hinted that it will be more active in the longer period to implement more measures to cut interest rates.
"We believe that, despite the central bank today seem more cautious, but there is ample reason to cut interest rates 50 basis points again at the next meeting," said St Paul's Haitong economic analyst in the research report.
Most analysts are expected to cut interest rates again, many of them bet the central bank will cut interest rates more aggressively by 50 basis points.
Brazil's central bank last year to maintain the benchmark interest rate unchanged. Brazil is one of the countries with the highest interest rates among the group of 20 (G20).
However, inflation slowed, and Congress approved a preliminary key austerity proposals, the central bank's new president Gold Fein (Ilan Goldfajn) have sufficient reason to cut interest rates.
This or will boost investor confidence; earlier this year, the political turmoil in Brazil led to the impeachment of former president Rousseff to step down, the domestic economy has suffered heavy losses.
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