Rate cut by Brazil's central bank chief

BRAZIL - Central bank governor Arminio Fraga's surprise move to cut interest rates marks a shift in strategy, and a gamble, as he weighs the need to contain inflation yet entice investors in a presidential election year.

On Wednesday, the central bank shaved the Selic prime lending rate to 18.75% from 19%, the first time Mr. Fraga has reduced rates while inflation runs ahead of the government's target, and the first time he has changed them by less than one-half of a percentage point.

Economists

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