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Brazil's inflation likely remains near 9 percent in mid-September

Published 09/20/2016, 01:32 PM
Updated 09/20/2016, 01:40 PM
© Reuters. People walk in front of a store on a commercial street in downtown Sao Paulo

BRASILIA (Reuters) - Brazil's 12-month inflation rate probably remained near 9 percent in mid-September, leaving in doubt a possible interest rate cut by the central bank next month even as food prices ease, according to a Reuters poll on Tuesday.

Consumer prices as measured by the IPCA-15 index probably rose 8.91 percent in the 12 months through mid-September, little changed from the 8.95 percent increase through mid-August, according to the median of 22 forecasts.

On a monthly basis, prices probably rose 0.35 percent, down from an increase of 0.45 percent in mid-August, according to the median of 25 estimates for the indicator due on Thursday.

The central bank's official inflation target is 4.5 percent, a goal it expects to reach only in late 2017. The bank has kept its benchmark interest rate at 14.25 percent, the highest in a decade, but has signaled it could start lowering rates in the coming months if inflation falls more substantially as the economy reels from its worst recession in eight decades.

Most of the expected price increases in the past month were from higher health care and housing costs, economists at Itaú Unibanco said in a research note.

Food and beverage prices, which have surged in recent months as weather hurt crops, are expected to have eased in the first two weeks of September, led by falling milk and bean prices.

© Reuters. People walk in front of a store on a commercial street in downtown Sao Paulo

Estimates for the month-on-month inflation rate ranged from 0.24 percent to 0.45 percent, while forecasts for the 12-month rate were between 8.80 percent and 9.02 percent.

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