For the second time this year, Copom reduces interest rates

14/04/2004 - 21h32

Brasília, 4/15/2004 (Agência Brasil) - Yesterday the nine members of the Monetary Policy Committee (Copom) unanimously decided to reduce Brazil's benchmark interest rate (known as the Selic) from 16.25% to 16%.

This is the second time this year Copom has reduced the Selic. The reduction was expected by the market, although there were complaints that the reduction could have been bigger. The president of the National Industrial Confederation, Armando Monteiro, said it showed an "excess of caution," because, in his opinion, the 0.25 percentage point reduction was insufficient to get the country back on the path to renewed growth.

Some banking institutions said the reduction would translate into reduced costs for some services. The Federal Savings and Mortgage Bank (Caixa Economico Federal) announced reductions in interest rates.

The next Copom meeting is scheduled for May 18 and 19.

Translator:Allen Bennett