Brazil cuts interest rates to new record low

[BRASÍLIA] Brazil's central bank cut its interest rates to a new historic low for the third month running on Wednesday as Latin America's biggest economy struggles to grow.

The bank cut its main rate from 5.5 to 5.0 per cent and said another such drop could be on the way.

The cut was unanimously adopted by the bank's monetary policy committee (COPOM) which said it had taken into account the slowing of the global economy and pro-market reforms in the country.

It predicted an "additional adjustment of equal magnitude" in December.

The bank made 12 consecutive cuts from October 2016 to March 2018, slashing the rate from 14.25 percent to 6.5, where it remained until July when it was cut again to 6.0.

Another drop to 5.55 in September was followed by a tiny adjustment to 5.5 last month.

The latest cut was made possible by a pension reform approved by Congress earlier this month that will allow Brazil to save 800 billion reais (S$272.2 billion) over the next decade.

Even so, the rate cuts have so far failed to stimulate the economy.

AFP