Thursday June 11, 12:43 AM
Brazilian central bank cuts interest rate to 9.25%
BRASILIA, Brazil (AFP) - The central bank of Brazil late Wednesday cut its reference interest rate by one percentage point to 9.25 percent, one day after the government said the country was officially in recession.
It was the third cut by the bank's Monetary Policy Committee since March, when the full impact of the global financial crisis was being felt on Brazil's previously dynamic economy.
The reduction was greater than expected by the market, which had been expecting a 0.75-percentage-point trim.
Brazil's government said Tuesday that gross domestic product fell 0.8 percent in the first quarter of this year, after a 3.6 percent decline in the fourth quarter of 2008.
That meant that Brazil's economy now meets the widely accepted definition of recession: two consecutive quarters of economic contraction.
In addition, unemployment in Latin America's biggest economy has reached nine percent, the highest in two years, according to recent statistics.
Finance Minister Guido Mantega said on Monday, however, that the worst "is behind us and the Brazilian economy is already showing signs of recovery."
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