Brazil Cuts Benchmark Rate

In line with market expectations, Brazil’s Central Bank yesterday, Wednesday, cut its benchmark overnight lending rate (Selic) three-quarters of a percentage point to 16.5%. This is the lowest rate in almost a year and a half and is the second month in a row the Bank has made such a large cut in the rate. The government wants to fuel faster growth in the economy, which has stagnated in recent months. GDP growth last year has been estimated at only 2.2%, well behind the 4.9% expansion seen in 2004 and far behind other large economies in the region such as Venezuela and Argentina.