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Brazil's central bank cuts interest rates to record low

[BRASÍLIA] Brazil's central bank slashed interest rates to a record low on Wednesday in response to the worsening outlook for Latin America's biggest economy.

The bank cut its main rate to six per cent from the previous level of 6.5 per cent, which had been unchanged since March 2018.

The monetary policymaker had been resisting pressure to reduce borrowing costs for fear of fanning inflation as President Jair Bolsonaro struggled to push his signature pension reform bill through Congress.

But the controversial measure cleared a key hurdle earlier this month after the lower house voted overwhelmingly in favour of the proposed changes.

The plan to introduce a minimum retirement age and increase contributions over a longer period of time is seen as crucial to Mr Bolsonaro's ability to deliver on other promised measures to shake up the economy, which is on the brink of recession.

AFP

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