Brazil's Fraga says rates may be cut further

BRAZIL - Central bank chairman Arminio Fraga said he has indications that demand is falling and GDP growth is weakening in Brazil, which would justify new interest rate cuts.

In an interview with Brazilian financial daily Valor Economico, Fraga said: "There are signs that demand is falling. If this were to be confirmed, we would have to react.

"This would lead to a fall in the expected inflation rate and (the central bank) has instruments to cushion this situation," he added

Fraga confirmed this

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