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Brazil central bank slashes key rate one point to 9.25%

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Brazil's central bank on Wednesday announced a one percentage point cut to its key interest rate, bringing it down to 9.25 per cent as the country struggles to put a deep recession behind it.

[RIO DE JANEIRO] Brazil's central bank on Wednesday announced a one percentage point cut to its key interest rate, bringing it down to 9.25 per cent as the country struggles to put a deep recession behind it.

It was the seventh consecutive cut to the so-called Selic rate, underlining the bank's confidence that inflation in Latin America's biggest economy was under control.

Wednesday's decision meant the Selic was now below the 10-per cent level for the first time since October 2013.

The International Monetary Fund said two weeks ago that Brazil appeared to have turned a corner, recovering weakly from a recession that last year saw its economy contract 3.6 per cent.

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That was largely down to "ambitious" reforms by conservative President Michel Temer, it said.

But it cut this year's growth outlook from a previous 1.7 per cent to 1.3 per cent, and noted that it was "uncertain" whether the government could deliver on pledges to improve its fiscal performance and to overhaul social security.

AFP

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