Brazil inflation slows in mid-Oct

Brazilian inflation slowed in the month to mid-October as price gains in food including dairy products moderated, official statistics showed. The government's statistics agency IBGE said on Wednesday Brazil's benchmark IPCA inflation index rose 0.24 per cent in the month to mid-October, slowing from a 0.29 percent increase in the month through mid-September.
Still, the inflation figure was higher than the 0.21 percent median forecast of 17 economists surveyed by Reuters. The estimates ranged from 0.20 percent to 0.22 percent. The so-called IPCA-15 tracks prices from around the 15th of one month to the 15th of the next.
The central bank, which has an inflation target this year of 4.5 per cent, uses the IPCA as a guide when setting interest rates, and the inflation gauge is indexed to over $120 billion worth of Brazilian government bonds. In the 12 months through mid-October, the IPCA inflation clocked 4.15 per cent and the index rose 3.4 per cent since the start of the year, the IBGE said.
Foodstuffs and beverages price group had a 0.54 percent rise after a 0.87 per cent increase in the previous four-week period. But the price of beans, one of Brazil's main dietary staples, rose sharply, over 8 percent. Fruit prices soared 8.78 perc ent after 0.09 per cent, making the biggest contribution to the index' rise.
Milk prices had a considerable drop, the IBGE said. Fuel and electricity prices also fell. At the end of August, the federal government had 218.79 billion reais ($121.15 billion) of outstanding 6 per cent coupon bonds linked to the IPCA inflation index, according to Central Bank and Treasury data. The bonds pay a coupon every six months and have their nominal value adjusted according to the IPCA index.
Source: The Economic Times