Brazil cuts annual basic interest rate to 10.25%

Special Report:Global Financial Crisis

RIO DE JANEIRO, April 29 (Xinhua) -- Brazilian Central Bank decided to cut the country's annual basic interest rate Selic from 11.25 to 10.25 percent, the bank's Monetary Policy Committee (Copom) said in a statement on Wednesday.

The new rate, the lowest since the Central Bank started the measurements in 1996, was the third consecutive cut in the Selic rate this year. The country cut the rate from 13.75 to 12.75 percent in January, and from 12.75 to 11.25 in March.

The cut, a unanimous decision by the members of the (Copom), matched the expectation of most economists, who considered that the Central Bank was unlikely to repeat the previous 1.5 percentage point reduction, due to the latest signs of economic recovery.

With the cut, Brazil is no longer the country with the highest real interest rate (interest rate minus inflation rate) in the world. The country's real interest rate of 5.8 percent is now the third highest, after China (6.6 percent) and Turkey (6.4 percent).