Cityscape of downtown Sao Paulo, Brazil, January 13, 2025. REUTERS/Jorge Silva/File Photo Purchase Licensing Rights, opens new tab SAO PAULO, Feb 11 (Reuters) – Brazil’s inflation rate slowed in January from the previous month, data showed on Tuesday, but the 12-month rate was still above the upper end of the central bank’s target range, keeping expectations intact for another rate rise next month.
In Latin America’s largest economy, consumer prices as measured by the benchmark IPCA index rose 0.16% last month, government statistics agency IBGE said, slowing from a 0.52% increase in December and meeting forecasts in a Reuters poll of economists.
That was the lowest level of price increases for January since Brazil’s real currency was established in 1994, driven by a drop in housing costs as electricity prices fell sharply on the back of credits on household energy bills.
Annual inflation stood at 4.56%, decelerating from the 4.83% registered in the previous month.
Brazil’s central bank targets inflation at 3%, plus or minus 1.5 percentage points, and has been tightening its monetary policy in order to return it to the official goal.
Policymakers at the bank unanimously voted in January to raise the benchmark interest rate by 100 basis points for the second straight meeting to 13.25%, and signalled another hike of that size in March.
The latest inflation figure "is unlikely to prevent the central bank from delivering another 100bp hike to the Selic rate," Kimberley Sperrfechter of Capital Economics said, noting that inflation expectations remain unanchored."For now, we think that March’s […]
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