The Brazilian central bank cut policy rates to a new record low on August 5, in a bid to offset the economic effects of Covid-19.

Its monetary policy committee (MPC) unanimously voted to cut the key Selic rate by 25 basis points to 2%. In 2020, the Central Bank of Brazil has reduced rates by 250bp. The MPC said in its policy statement that it “believes the current economic conditions continue to recommend an unusually strong monetary stimulus”.

But the policy-makers acknowledged they may not

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