Logo of Phnom Penh Post newspaper Phnom Penh Post - Brazil central bank cuts interest rate

Brazil central bank cuts interest rate

Content image - Phnom Penh Post
Brazilian President Jair Bolsonaro delivers a speech in Brasilia on July. AFP

Brazil central bank cuts interest rate

Brazil's central bank cut its benchmark interest rate on Wednesday to a new record low of 4.25 per cent, seeking to boost what it called the “gradual recovery” of Latin America’s largest economy.

The quarter-point cut, in line with market expectations, was decided unanimously by the bank’s monetary policy committee, it said in a statement.

It was the fifth straight decrease since July 2019. But the bank indicated the loosening cycle was coming to an end.

“The Monetary Policy Committee understands that the current stage of the economic cycle demands caution,” it said.

“The Committee sees interrupting the monetary loosening cycle as appropriate. It emphasises that its next steps will continue to depend on how economic activity evolves, the risk outlook, and inflation expectations and projections.”

The Brazilian economy is slowly bouncing back from its worst-ever recession, which ended in 2017 after two years. The government is currently forecasting growth of 2.4 per cent this year, double the estimate for 2019.

But although far-right President Jair Bolsonaro’s government has won plaudits from the business world for pushing through long-sought economic reforms, clouds linger.

The deadly new coronavirus outbreak in China – Brazil’s top trading partner – has taken a hit on leading Brazilian exporters, including state oil company Petrobras and mining firm Vale.

Vale’s stock-market value has plunged by around $5.5 billion since January 23.

And statistics released on Tuesday showed Brazil’s industrial output fell by 1.1 per cent last year, after two years of growth.

Brazil’s inflation rate came in at 4.31 per cent for 2019.

Analysts polled by the central bank are forecasting inflation of 3.4 per cent this year, on the lower side of the bank’s target range of four per cent plus or minus 1.5 percentage points.

MOST VIEWED

  • Purging Sihanoukville’s past with a new masterplan

    Amid illicit activities, haphazard development and abandoned projects, the coastal city of Sihanouk province needs a reset to move forward. A new masterplan might be the answer to shake off its seemingly mucky image to become the Shenzhen of the south Gun toting, shootouts, police

  • Chinese may be first in tourism revival: PM

    Cambodia's tourism industry is gearing up to roll out the red carpet for Chinese travellers after Prime Minister Hun Sen on September 17 indicated that the Kingdom could soon throw open its doors to international holidaymakers vaccinated against Covid-19 – starting with guests from China. Cambodia Chinese

  • Four-pillar approach in reopening of tourism: PM

    Cambodia is drawing up a four-strategy approach to promptly restore domestic and international tourism activity and put the industry on a transition pathway to a sustainable and inclusive model that is resistant to future crises, according to Prime Minister Hun Sen. The prime minister made

  • Airline says ready for green light to reopen international tourism

    Sky Angkor Airline Co Ltd on September 21 said it is ready to transport South Korean and Chinese tourists to the Kingdom once the Cambodian government makes good on plans to reopen its borders to vaccinated travellers. The Siem Reap-based airline made the remark during a

  • Tourism concerns laid bare

    To ensure the success of plans to reopen the tourism market for international visitors, Cambodia must pay utmost attention to two primary determinants – the ongoing paradigm shift in domestic tourism services towards the ‘new normal’, and the factors influencing choices of destinations among foreign holidaymakers.

  • Cambodian bride ‘badly treated, held captive’ by Chinese man seeks help

    A Cambodian woman who travelled to China to marry a Chinese man there was “badly treated” by her husband’s family and then had to be rescued and will be returned to Cambodia to ensure her safety. The rescue operation came about after the 25-year-old