Brazil cuts rates further as growth slows Brazil's central bank has cut its benchmark interest rate to the lowest level in two years in an attempt to revive sluggish growth and restore the country to the ranks of fast-growing emerging markets. In its sixth consecutive cut, the bank's monetary policy committee on Wednesday reduced Brazil's Selic rate by 75 basis points to 9 per cent, in line with the majority of analysts" estimates. IN Americas Finance "At this moment, the risks for the trajectory of inflation remain limited," the central bank said in an accompanying statement, adding that the decision had been unanimous. The committee also notes that until now, given the fragility of the global economy, the contribution of the external sector has been disinflationary. Brazil has been fighting a sharp slowdown in its once booming economy, doling out tax incentives to struggling manufacturers as well as shaving 350 basis points off the country's benchmark interest rate since last August. At 9 per cent, Brazil's Selic rate is now at its lowest level since April 2010 and only 25 basis points off its 15-year low of 8.75 per cent. Data this week showed economic activity in Brazil slipped 0.2 per cent in February, raising concerns over a slowdown that has been blamed on the turmoil in global markets as well as structural problems in the country's own economy. After expanding at a China-like rate of 7.5 per cent in 2010, Brazil eked out growth of only 2.7 per cent last year, lower than any of the so-called Brics group or even some developed countries such as Germany. However, many analysts believe Alexandre Tombini, Brazil's central bank president, will soon bring the current easing cycle to an end. As well as allowing recent stimulus measures to take effect, a pause in rate cuts could give the government time to prepare for some of the effects of a return to record-low interest rates - namely a mass exodus from government bonds into savings accounts. "The (interest rate) threshold is really 8.75 per cent so if you go below that, then you're better off keeping your money in tax-free savings," said Italo Lombardi, Latin America economist at Standard Chartered. Pausing now will buy them some time to make necessary changes to savings accounts ... so that government bonds won't lose competitiveness as they reduce interest rates. It would also give the government more time to make sure that recent interest rate cuts actually reach consumers. Earlier on Wednesday, Bradesco and Itaú-Unibanco became the latest privately-run banks to promise lower borrowing costs after Brazil's government pushed state lenders to reduce their spreads. "Last year the monetary policy rate decreased a lot but the spreads even increased," said Marcelo Moura, a professor of macroeconomics and finance at Insper, a Brazilian education institution. "It doesn't have any effect on the economy if you just lower the monetary policy rate and the actual interest rates that consumers and companies pay doesn't move," he said. "The only thing that monetary policy has been doing is increasing banks" profits."