MercoPress. South Atlantic News Agency

Economists forecast further interest rate cuts by Brazil's central bank

In the weekly Focus poll, the median response of about 100 analysts polled by the central bank said they saw the Selic at 5.25% at the end of this year

Economists lowered their forecasts for where Brazil’s benchmark Selic interest rate will be at the end of 2019, a weekly central bank survey showed on Monday, after policymakers cut rates more aggressively than most expected to a record low last week.

Brazil’s central bank on Wednesday cut its benchmark rate by 50 basis points to 6.00%, in a bid to inject life into a moribund economy and prevent inflation from slipping too far below target. It was the bank’s first rate cut since March 2018, following significant progress on domestic fiscal reforms and looser monetary policy abroad.

In the weekly Focus poll, the median response of about 100 analysts polled by the central bank said they saw the Selic at 5.25% at the end of this year, down from 5.50% a week ago.

Economists maintained their median inflation forecasts of 3.80% this year and 3.90% in 2020. The median forecasts for economic growth and the exchange rate for 2019 were also unchanged.