BRASILIA, Oct 11: Brazil’s central bank on Wednesday slashed its interest rate for the 10th time since August last year, to a record low of 7.25 per cent, in a bid to stimulate the sluggish economy.

The bank’s monetary policy committee Copom, which announced the quarter-point reduction after the market closed, said the decision was made given inflationary risks, the domestic economy and global economic uncertainty.

Late last month, the central bank lowered its forecast for Brazil’s economic growth in 2012 from 2.5 per cent to a measly 1.6 per cent, but is counting on that number to pick up next year. The government, which has launched a series of stimulus measures this year, is banking on two percent GDP growth this year — down from an earlier forecast of three per cent — while market analysts are forecasting a 1.5 per cent rise.

The world’s sixth largest economy showed clear signs of a slowdown in the first half of this year, expanding only 0.6 per cent compared with the previous quarter. The Brazilian economy grew a paltry 2.7 per cent last year, down from a strong 7.5 per cent in 2010.—AFP