News - Brazil May Cut Rate Next Month, Morgan Stanley Says

Dec. 15 (Bloomberg) — Brazil’s central bank may cut its benchmark interest rate in January, earlier than previously forecast, to “cushion” Latin America’s largest economy from the global credit crisis, Morgan Stanley said.

The central bank may reduce interest rates by 50 basis points at each of its next four meetings, Morgan Stanley said in a report today. Previously it expected a total of 100 basis points cut by the end of 2009, beginning in the third quarter.

Last week, Brazil’s central bank decided to keep the benchmark rate at 13.75 percent, a two-year high, after discussing “the possibility of lowering” it as growth slows.

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