Brazil's Monetary Policy Committee (Copom) announced on Wednesday evening a cut in the country's annual basic interest rate Selic from 9.75 to nine percent.

It was the third consecutive cut in the Selic rate this year, and the sixth reduction since August 2011. The Selic rate now stands at its lowest level in two years.

According to a statement released by Copom, it's appropriate now to cut the basic interest rate as the inflationary pressure in Brazil has been eased and the sluggish economy needs to be stimulated.

Since the beginning of the year, the Selic rate has accumulated a fall of two percentage points. With the cut, the rate gets closer to its lowest level of 8.75 percent (from July 2009 to April 2010).

Also on Wednesday, Brazil's two largest private banks, Bradesco and Itau Unibanco, announced reductions in the interest rates charged for individual and corporate loans, as well as an increase in the volume of credit available for those operations.

The decision follows a similar measure announced by major government-owned banks Caixa and Banco do Brasil and the local branches of international banking groups such as HSBC and Santander. The interest rates in the loans offered by Brazil's Development Bank BNDES were also lowered.