Brazil's Central Bank Cuts Benchmark Rate to Near Its Lowest Level Ever

By Paulo Trevisani and Jeffrey T. Lewis Features Dow Jones Newswires

BRASÍLIA -- Brazil's central bank Wednesday cut its benchmark interest rate to near its lowest level ever, to boost a feeble economy that has begun to recover despite political paralysis in Latin America's largest nation.

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The bank trimmed its Selic rate to 7.5% from 8.25%. A rapid slowdown in price increases has allowed the bank to cut the Selic from 14.25% over the past year. Annual inflation was 2.5% in September, well below the bank's target of 4.5%.

The bank said inflation developments remain favorable, and that the country's economic situation "prescribes accommodative monetary policy."

Wednesday's cut follows four larger ones of a full percentage point each. Central-bank communication has indicated the Selic will end this year at 7%, with analysts divided over the possibility of further cuts in 2018.

Write to Paulo Trevisani at paulo.trevisani@wsj.com and Jeffrey T. Lewis at jeffrey.lewis@wsj.com

(END) Dow Jones Newswires

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October 25, 2017 16:53 ET (20:53 GMT)