[Brazilia 18th Reuters]-The Brazilian Central Bank decided to cut its policy rate by 50 basis points (bp) to a record low of 5.50% on the 18th. As expected, it suggested that there was room for further mitigation while inflation was well below target.
The rate cut decision following the July meeting was unanimous.
In a statement after the policy meeting, the central bank maintained language suggesting additional rate cuts within a few months.
“The Monetary Policy Committee (COPOM) believes that additional inflation adjustments will be possible due to the strong prospects for inflation,” reiterating that the next move in policy will depend on the outlook. .
Brazil's consumer price index (CPI) rose 3.43% in August, well below the central bank's target of 4.25% in August.
According to a central bank economist survey announced on the 16th, inflation at the end of 2019 is expected to be 3.43%, and the policy rate at the end of 2020 is expected to be 5.00%.