Brazil cuts lending rate to record low of 12%

Following the recovery of the Brazilian currency, which has held inflation at an eight-year low, the central bank lowered the benchmark lending rate by half a percentage point to a record low of 12%.

Rates have come down rapidly in Brazil, after reaching highs of 19.75% in September 2005. This latest cut had been widely anticipated by economists, who interpret it as the central bank's increased emphasis of the effects of the exchange rate on the economy and inflation. Another half percentage c