Brazil’s central bank cut interest rates by 0.5 percentage points more than expected on Wednesday for the first time in three years as emerging markets began to ease monetary policy.
According to the bank’s monetary policy committee, members voted 5 to 4 to cut Selic’s base rate to 13.25%.
The four negative votes, a rarity for the committee, which usually votes unanimously, were in line with most analysts’ expectations for a modest quarter-point cut.
“Having considered alternatives to lowering the key rate to 13.5%, the committee determined that a 0.5 percentage point reduction pace was appropriate given the improving inflation situation,” the committee said in a statement.
The committee said this was the beginning of a “gradual cycle of monetary easing” and that members “unanimously” expected another 0.5 percentage point cut at our next meeting, with the next meeting expected to be It said it would end on September 20th.
“Inflation is under control, and we are planning for the future of the economy. Investors, consumers, and families will be able to plan for financially, socially, and environmentally sustainable growth in Brazil,” Finance Minister Fernando Hadad said.
