Brazil makes first rate cut in cycle

Central Bank of Brazil

After a pause of nearly a year and months of political pressure, the Central Bank of Brazil (BCB) cut its Selic policy rate by 50 basis points on August 2. The cut brings the rate to 13.25%.

The size of the cut surprised market observers and split the central bank’s board, which also serves as its monetary policy committee. Many experts had expected a 25bp cut, but five board members backed the 50bp option, versus four in favour of 25bp.

Between March 2021, when it began increasing rates, and

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