Brazil’s central bank cut interest rates by another 0.25% but signalled that the downward cycle had probably reached its limit after an 11th consecutive reduction that took the bank lending rate to 6.75%.

The reason that Brazil’s rates have found a floor at a higher point than many had predicted is partly viewed as a reaction to the perceived trend in US interest rates. It is, however, also linked to the government’s current difficulties in continuing with its programme of orthodox economic reforms.

Chamber of Deputies speaker Rodrigo Maia continued to express his interest in scheduling a vote in late February, and the administration has hinted at further softening measures to make the proposed reform package more digestible to deputies as they prepare for elections. Cabinet Secretary Carlos Marun has acknowledged, however, that the Administration is still 40 votes short of the 308 guaranteed votes that are necessary to stage the vote.

A fiscal study carried out on behalf of the Senate reported that the failure to approve the reforms would push Brazil’s gross public sector debt from 76.9% of GDP in 2017 to more than 100% of GDP by 2023, rising to 112.5% in 2024 and 116.4% by 2030.

Brazil’s national debt stood at 74.5% at the end of 2017 and — in his re-opening of Congress speech — President Michel Temer urged lawmakers to do their duty, and said that ample concessions had already been made.

If a pension vote does not take place by 28 February, the focus will switch to approving the law, including measures that will allow the flotation of the state-owned Eletrobras’ shares to move ahead.

Other matters that may move up on the agenda include Brazil’s: tax reform; the securitisation of national debt; increased independence for the central bank; de-regulatory measures for the natural gas sector; and the removal of a legislative bar on Still 40 short of the necessary 308 votes Petrobras farming down its 100% interest in the ‘transfer of rights’ area.