Brazil's Finance Minister Henrique Meirelles on Wednesday (Oct 19) said the Central Bank Monetary Policy Committee (COPOM) decision to reduce the SELIC benchmark interest rate is a sign that the government is on the right track to bring inflation (which currently stands at an annual 8.48%) closer towards the 4.5% target set by the National Monetary Council (CMN).

Meirelles also pointed out that the Central Bank's decision was made independently. “There's no question that if the Central Bank is doing it, that's because it gave it careful thought and decided the conditions were right for relaxing monetary policy,” he said.

The Monetary Policy Committee has reduced the benchmark interest rate by 0.25 percentage points to 14% p.a. This has been the first interest cut in four years.