Brazil cuts interest rate 50 basis points to 12.75%

Global environment more uncertain, disinflationary process continuing, says central bank

By Ovunc Kutlu

ISTANBUL (AA) - Brazil’s central bank lowered its interest rate by 50 basis points to 12.75% -- its second consecutive rate cut.

"The global environment became more uncertain, with the disinflationary process continuing despite an environment of high core inflation and resilience in the labor market of many countries," the bank said late Wednesday.

Banco Central Do Brasil last made a rate hike of 50 basis points in August 2022, carrying the rate to 13.75%, the highest since early 2017, and significantly up from a record low of 2% in March 2021.

The central bank lowered its interest rate by 50 basis points to 13.25% in early August -- its first rate cut in three years.

Brazil's annual consumer inflation came in at 4.61% in August, accelerating from the year-on-year gain of 3.99% in July.

Inflation is expected to average 5% in 2023 and 3.5% in 2024, according to the bank's monetary policy committee.

Kaynak: