It’s Too Soon for Brazil to Relent on Rate Cuts

The adult in the room, Central Bank of Brazil Governor Ilan Goldfajn.

Photographer: Andressa Anholete/AFP/Getty Images

Brazil's central bank has been unrelenting in its interest-rate cuts. It's too soon to ease up. 

With inflation tumbling, the economy still struggling and the country's political class mired in one graft accusation after another, Central Bank of Brazil Governor Ilan Goldfajn looks like the adult in the room. It's a mantle he may not be entirely comfortable with, but one he is destined to wear until at least next year when presidential elections are scheduled. 

The BCB, as the central bank is known, has been aggressive. This week's full percentage-point cut in Brazil's benchmark rate was the fourth of that magnitude this year. They followed a series of reductions that began last year after Goldfajn took the helm. In all, borrowing costs have come down six percentage points since October.