Stênio Ribeiro         Reporter Agência Brasil

Brasília – The Central Bank’s Monetary Policy Committee (“Copom”) surprised the market at the end of its most recent regularly scheduled meeting yesterday and reduced the country’s basic interest rate, the Selic, from 12.50% to 12%. It was the sixth Copom meeting of the year (they take place every 45 days) and the first Selic reduction since the beginning of 2010 [historical note: the Selic began to decline in January 2009, going from 13.75%, to reach a historic low in July 2009, when it was one digit, less than 9% (8.75%), for the very first time; but then, in April 2010, a series of increases began that only came to an end yesterday].

The Copom vote was 5 to 2 for the reduction and in a note the committee said it saw signs of reduced economic activity (generalized and of great magnitude – “generalizadas e de grande magnitude”) in the world’s principal economic blocks. The note added that this year the Selic had risen from 10.75% (since January) due to strong domestic economic activity and inflationary pressures.

Allen Bennett – translator/editor The News in English
Link - Banco Central surpreende mercado e diminui taxa básica de juros para 12%