The Monetary Policy Committee of Brazil's central bank (Copom) announced in the evening on March 18 their decision to cut annual basic interest rate (Selic) from 4.25% to a fresh record low of 3.75%.

It was the seventh consecutive cut in the Selic rate amid fears of a global recession caused by COVID-19.

In its statement, the Copom attributed the new cut to rising concerns over the COVID-19 pandemic, the "significant deceleration" in global growth rate, falling prices of commodities, of which Brazil is a major producer, and global market volatility.

The Copom had lowered the Selic rate by 25 basis points to 4.25% on Feb. 5, the lowest since Brazil adopted an inflation-targeting framework in 1999.

In early February, the Copom believed the string of cuts in the Selic rate had come to an end.

However, Brazil soon joined the rank of countries facing a rising number of COVID-19 cases. Since the beginning of March, the country's stock exchange B3 has been facing significant problems, with sharp falls triggering the circuit breaker mechanism in five out of the last eight sessions.

On March 18, the committee did not deny that new cuts could be made if necessary. The Copom meets every six weeks to analyze the Selic rate. Its next meeting is scheduled for May 5-6.

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