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BRASILIA, April 18 (Reuters) - Weak economic activity in Brazil would allow for an acceleration of monetary easing, but lingering uncertainties make the current pace of rate cuts more appropriate, the central bank said in minutes of its policy-setting meeting released on Tuesday.
Copom, the bank’s nine-member monetary policy committee, decided last week to lower its benchmark Selic rate by 100 basis points to 11.25 percent, the biggest reduction since June 2009. It had made cuts totaling 3 percentage points at the last four meetings.
In the minutes, the bank said factors that could reverse the current downward inflation trend, such as potentially unfavorable global conditions and a possible failure to approve austerity reforms, called for a more cautious approach.
Politicians and business groups have been pressuring central bank chief Ilan Goldfajn to step up the pace of rate cuts to revive an economy still struggling to emerge from its deepest recession ever.
All Copom members said more austere fiscal programs would be key to disinflation and monetary policy decisions, the minutes showed.
After peaking at 10.7 percent in January 2016, inflation has eased to the 4.5 percent center of the official target due to weak economic activity and austerity measures to limit government spending.
President Michel Temer, who faces low approval levels amid a widening corruption probe, meets with lawmakers later on Tuesday to decide on changes to water down a proposed landmark pension overhaul.
Analysts say the proposal, which sets a minimum age of retirement and limits other pension benefits, is important for Brazil to cap its surging debt and recover its investment-grade rating. (Reporting by Alonso Soto and Silvio Cascione; Editing by Chizu Nomiyama and Lisa Von Ahn)