Brazil central banks cuts its benchmark rate by 50bp (vs. 25bp cut expected)

Brazil’s central bank, Banco Central do Brasil​, has cut its benchmark rate, Selic target rate, by 50 basis points.

The consensus was for a 25bp cut. The Bank says that 25 was considered but the improvement in inflation dynamics was enough for a 50 point move:

  • the current situation demands serenity and moderation in the conduct of
    monetary policy
  • if expected scenario
    is confirmed, the committee unanimously expects a rate cut of same
    magnitude in coming meetings
  • the total magnitude of
    easing cycle will depend on the inflationary dynamics, inflation
    expectations, inflation projections, output gap and the balance of

Fingers crossed that rate cuts will spread more widely.

This article was written by Eamonn Sheridan at Source