By Ovunc Kutlu
ISTANBUL (AA) - Brazil’s central bank lowered its benchmark interest rate by 50 basis points on Wednesday to 11.25%, its fifth consecutive rate cut.
"The global environment remains volatile, with a debate about the beginning of the easing cycle in major economies and signs of lower core inflation, despite remaining at high levels in many countries," the bank said in a statement.
"Regarding the domestic scenario, the set of indicators on economic activity remains consistent with the scenario of deceleration expected by Copom. Headline consumer inflation, as expected, remains in a path of disinflation, and various measures of underlying inflation are closer to the inflation target in recent releases," it added.
The central bank said its monetary policy committee members "unanimously anticipate further reductions of the same magnitude in the next meetings."
Banco Central Do Brasil last implemented a rate hike of 50 basis points in August 2022, bringing the rate to 13.75%, the highest since early 2017 and up sharply from a record low of 2% in March 2021.
It lowered its interest rate by 50 basis points to 13.25% in August 2023, its first rate cut in three years.
Annual consumer inflation in the South American country slowed to 4.68% in November, from the 4.82% in October.
Inflation is expected to average 3.5% in 2024 and 3.2% in 2025, according to the bank's projections.
"The central banks of major economies remain committed to bringing inflation back to its targets in an environment characterized by labor market pressures. The Committee judges that the environment continues to require caution from emerging market economies," it said.