Brazil Central Bank Cuts Interest Rates: Daily

By Anna Fitzpatrick, Contributing Reporter

SÃO PAULO, BRAZIL – Head of the Brazilian Central Bank Alexandre Tombini, indicated yesterday it will continue with its policy of gradually cutting interest rates, despite fears over inflation. The readjustment comes in light of the contraction of the international economy.

However, Tombini was at pains to point out that inflation will still be within its target range of 4.5 percent, plus or minus two points in December 2012.

“Moderate adjustments” in the SELIC rate are in line with achieving the inflation target for the next year, he reiterated. Brazil currently has one of the highest rates of inflation in the world.

Tombini also adjusted the expectations for Brazilian economic growth slowing to 3.5 percent, which he believes will help keep inflation rates within the target rage. Just as President Rousseff did, Tombini noted that many countries currencies had devalued in relation to the dollar – not just the Brazilian real.

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