Brazil Inflation Speeds Up Ahead Of Central Bank's Rate Decision

• Consumer prices in Brazil rose more than expected in the month to mid-July on higher transportation costs, official data showed on Thursday, July 24, likely sealing the deal for the central bank to keep interest rates on hold at a policy meeting next week.
• Prices, as measured by the IPCA-15 index, were up 0.30% in the period, statistics agency IBGE (Brazilian Institute of Geography and Statistics) said, slowing from 0.39% in the previous month but overshooting the 0.23% increase forecast by economists polled by Reuters.
• In the 12 months to mid-July, inflation in Latin America's largest economy stood at 4.45%, up from 4.06% the month before and exceeding the 4.38% expected by economists in the Reuters poll.
• Jason Tuvey, an economist at Capital Economics, said that coming alongside fiscal concerns and recent weakness of the Brazilian real, the latest inflation data backed a view that the central bank will not resume rate cuts this year.
• Brazil's central bank targets inflation at 3%, plus or minus 1.5 percentage points. Last month, the monetary authority unanimously halted a rate-cutting cycle, citing higher inflation expectations and fiscal struggles.
• The next decision is scheduled for July 31, and markets believe the bank will maintain its key rate at 10.50%.

 (Source: Reuters)