RIO DE JANEIRO, May 6 (Xinhua) -- The Monetary Policy Committee of Brazil's central bank (Copom) announced Wednesday its decision to cut the annual basic interest rate (Selic) from 3.75 to 3.0 percent, the lowest since the country adopted an inflation-targeting framework in 1999.
This has been the seventh consecutive rate cut by the central bank since July last year. The latest cut was made due to the harsh effects of the COVID-19 pandemic on the Brazilian economy.
So far, Brazil has reported 125,218 confirmed COVID-19 cases with 8,536 deaths. However, several studies suggested that the accurate number is severely under-reported.
Another rate cut, no higher than the current one, may be made in the near future, stated the Copom, the majority of which favored a more gradual cut.
The committee added that Brazil's inflation may fall below projected levels.
As frustration over delay in reforms and new fiscal policies could lead to higher inflation, a continuation of the reform agenda should be guaranteed to allow for a sustainable recovery of the Brazilian economy, it said.
The Copom meets every six weeks to analyze the Selic. Its next meeting is scheduled for June 17. Enditem
