RIO DE JANEIRO, Brazil (AP) _ Brazil's Central Bank cut its benchmark interest rate from 21 to 19.5 percent late Wednesday, with officials citing a downward trend in inflation.

Interest rates have been gradually lowered since March as Brazil recovers from the financial instability which rocked it after the devaluation of its currency in January.

The benchmark rate was raised as high as 45 percent in early March, amid fears of sky-high inflation, but analysts now believe inflation will only be in single digits this year.

Analysts predict that the interest rate will continue to fall in the second half of the year, ending 1999 at between 17 and 18.5 percent.

Some, however, were surprised by the size of Wednesday's cut after a few election-year investor jitters this month in Argentina, a major trading partner for Brazil.