Brazil central banks cuts its benchmark rate by 50bp (vs. 25bp cut expected)

<p>Brazil's central bank, Banco Central do Brasil​, has cut its benchmark rate, Selic target rate, by 50 basis points.</p><p>The consensus was for a 25bp cut. The Bank says that 25 was considered but the improvement in inflation dynamics was enough for a 50 point move:</p><ul><li>the current situation demands serenity and moderation in the conduct of
monetary policy</li><li>
if expected scenario
is confirmed, the committee unanimously expects a rate cut of same
magnitude in coming meetings</li><li>the total magnitude of
easing cycle will depend on the inflationary dynamics, inflation
expectations, inflation projections, output gap and the balance of
risks</li></ul><p>Fingers crossed that rate cuts will spread more widely.</p>

This article was written by Eamonn Sheridan at www.forexlive.com.