Brazil affirms basic interest rate unchanged at 6.5 pct

Source: Xinhua| 2019-02-07 12:50:09|Editor: Shi Yinglun
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RIO DE JANEIRO, Feb. 6 (Xinhua) -- Brazil leaves its annual basic interest rate Selic unchanged at the record low of 6.5 percent, the central bank's Monetary Policy Committee (Copom) announced Wednesday in their first meeting of 2019.

It was the first Copom meeting since the beginning of President Jair Bolsonaro's government, and the seventh consecutive time the committee voted to maintain the rate at 6.5 percent, which is the lowest since Brazil set inflation targets in 1999.

The committee's decision was unanimous and took into consideration the balance of risks and the perspectives for Brazil's economy.

The current scenario calls for low interest rates, said Copom, adding that maintaining the Selic rate at 6.5 percent is compatible with the inflation rate's convergence for the target set for this year, which is 4.25 percent.

Copom also reiterated the importance of carrying out reforms in order to keep the inflation and interest rates low and to boost economic activity.

The Selic rate was last trimmed from 6.75 percent in March 2018.

The year 2017 saw the beginning of a slow recovery in Brazil's economic activity, with 1 percent of GDP growth.

For 2018, estimates are only slightly higher than those for 2017, largely because of a weak labor market, investments deferred by uncertainties about the elections and the truckers' general strike, which brought economic activities to a halt in May of 2018, according to the World Bank.