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Historic Rate Cut to Record Low Shows Brazil Return to Normalcy

Brazilian central bank governor Ilan Goldfajn is getting the thumbs-up from investors to cut the country’s benchmark interest rate to a record low on Wednesday.

 With inflation well within the target range, idle capacity, and fewer price distortions, Goldfajn can bring the country’s Selic rate to 7 percent, around half of the level just over a year ago. The vote of confidence is good news for a country that has been lurching from crisis to crisis for years, and to the central bank in particular, after its credibility was hit by a series of ill-timed cuts in 2012 that helped bring inflation back with a vengeance and heralded a credit rating downgrade.

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