Brazil's central bank decided to cut its policy rate by 0.5%, citing the continuing slowing trend in inflation. This is the first time in three years that we have cut interest rates.
Brazil's central bank held a meeting to decide monetary policy in the capital Brasilia on the 2nd and decided to cut the policy interest rate by 0.5% to 13.25%.
In order to respond to rapid inflation against the backdrop of Russia's invasion of Ukraine, the central bank raised the policy interest rate 8 times in a row until August last year, and has maintained a high interest rate of 12.13% since then.
Against this backdrop, fuel and food prices have declined, and the consumer price index rose at an annualized rate of 75.6 percent in June, the lowest level in two years and nine months, and inflation has continued to decelerate.
This is the first time in three years that Brazil's central bank has cut rates since August 3, and the statement said, "If things go as expected, we are considering a similar rate cut at subsequent meetings."
Central banks in South America have raised policy rates significantly ahead of Europe and the United States in response to inflation and currency depreciation, but Chile's central banks also lowered their policy rates last month due to slowing inflation.