Sao Paulo, Brazil (CNN) -- Brazil's central bank cut its benchmark interest rate more than expected on Wednesday night to 9.75% from 10.5% after a slew of disappointing economic data this week.
Analysts had been predicting the central bank would cut the so-called Selic rate to 10%. But on Monday, the government statistics agency IBGE reported Latin America¹s biggest economy had grown a sluggish 2.7% in 2011 -- far below its initial target of 4.5% and 2010 GDP growth of 7.5%.
Lower rates should help jump-start economic growth and slow inflows of foreign capital that have propped up Brazil's currency, making it hard for manufacturers to compete on a global stage.
The country's towering interest rates have been one of the biggest obstacles to growth, but the central bank has been cautious about bringing them down because of inflation concerns.