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BRAZIL: Central Bank Cuts Interest Rate To 6.75%

(Agencia CMA Latam) - The Brazilian central bank cut the country's benchmark interest rate (Selic) by 25 basis points, to 6.75% - a record low - and said that it might interrupt the current easing cycle in its next meeting, scheduled to March.

According to a statement released right after the meeting, the decision took into account a favorable external scenario as economic activity grows globally.

The board of the Brazilian central bank noted that at the next meeting, on March 20 and 21, it would be more appropriate to interrupt the current cycle of rate cuts.

"This vision for the next meeting may change and lead to additional moderate monetary loosening if there are changes in the evolution of the basic scenario and the balance of risks," the board added.

The statement also stresses that the set of indicators of economic activity have shown consistent recovery of the Brazilian economy since the previous meeting, held in December last year.

Regarding inflation projections for 2018, the statement reports that it would be around 3.9%. For 2019 and 2020, the estimates remained at 4.25% and 4%, respectively. The Selic should remain stable at 6.75% in 2018 and may close 2019 at 8%.

by Agencia CMA Latam

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