Less-than-stellar economic news prompted policy makers with the central bank of Brazil to reduce the interest rate by 75 basis points hours after the news broke, Bloomberg reports.
For only the second time in history, the nation's interest rate – now at 9.75 percent – is lower than 10 percent. Despite a rough 2011, the South Atlantic News Agency reports the largest economy of Latin America has surpassed that of the U.K. to become the globe's sixth-largest economy.
"They knew that they wanted to get to a single digit and they saw a window of opportunity to accelerate," chief Latin America economist Alberto Ramos with Goldman Sachs told Bloomberg. "It could be that the growth and inflation picture will change by May, and then it's not as easy to continue to cut."
Brazil saw production fall the most in the past 36 months this past January, according to Bloomberg. Additional news that came out on Wednesday is the economy last year had its second-worst performance in nine years.
The reduction, anticipated to be only 25 or 50 basis points, is likely to prompt concerns about inflation.
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