Amid the international economic slowdown, Brazilian President Dilma Rousseff said her government is set on continuing to lower the Selic benchmark interest rate, local news agency Agência Estado reported.
Barclays Capital expects the country's central bank (BCB) to make two more cuts of 50 basis points each, bringing down the benchmark rate to 11% at year-end.
Rousseff said future cuts in the Selic rate would depend on how the external and internal economic and financial environments develop.
She also noted that the government had raised this year's primary surplus target to 10bn reais (US$5.3bn), to make room for lower interest rates.
For his part, finance minister Guido Mantega said the government should use its monetary policy instruments to counter the international crisis' effects.
According to Mantega, Brazil has the necessary fiscal and monetary conditions to cope with a slowdown of the global economy. But the minister said monetary policy actions would be less costly for the country than fiscal measures to defend the local economy against the current crisis.