December 2, 2019 / 2:37 PM / 6 months ago

Brazil's central bank repeats signal for another 50 bps rate cut

BRASILIA, Dec 2 (Reuters) - Brazil’s central bank stands ready to lower its key Selic interest rate by another 50 basis points to a fresh record low of 4.50%, president Roberto Campos Neto said on Monday.

President Jair Bolsonaro also said on Monday that another reduction soon to 4.50% is on the cards, something he again said he would like to see.

The central bank’s rate-setting committee meets next week for the final time this year, having cut the Selic by half a percentage point at each of its last three meetings, the last one in October.

“The consolidation of the benign scenario for prospective inflation should allow an additional adjustment of the same magnitude as (the) October meeting,” Campos Neto said at an event at Bank of America Merrill Lynch in Sao Paulo, according to his presentation published by the central bank.

This has been a consistent message from the central bank since October’s rate cut. Annual inflation is running at 2.54%, well below the bank’s 2019 target of 4.25%, and is widely expected to undershoot next year’s target of 4.00%.

November’s inflation figures will be released on Friday.

Campos Neto’s comments come as the Brazilian real has slumped to a record low near 4.28 per dollar, prompting central bank intervention in the currency market. So far, the real’s weakness does not seem to have affected inflation expectations.

$1 = 4.2250 reais Reporting by Jamie McGeever Editing by Steve Orlofsky

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