The FINANCIAL — Consumer prices in Brazil picked up in June, putting the 12-month rate at its highest level in more than 11 years and highlighting one of the main challenges facing by Latin America’s largest economy, according to Nasdaq.
Brazil’s consumer-price index, the IPCA, rose 0.79% in June, compared with a increase of 0.74% in May, the Brazilian Institute of Geography and Statistics, or IBGE, said on July 8.
The rolling 12-month IPCA was up 8.89% through June, higher than 8.47% in May, remaining well above the central bank’s 6.5% ceiling. The 12-month figure marked the highest level since December 2003, when it had reached 9.30%.
Despite the increase, monthly inflation was in line with expectations. Economists had expected an increase of between 0.70% and 0.90%, according to a survey by The Wall Street Journal with 12 economists.
Brazil’s inflation has accelerated mainly due to a pickup in transportation prices during the period.
With continued pressure in current inflation, the central bank is making consecutive increases of the benchmark Selic interest rate.
The central bank raised Selic to 13.75% in early June, its highest level in more than six years–and warned in the minutes from the meeting that “determination and perseverance” are necessary to bring inflation down.
The monetary authority’s next two monetary-policy meetings are July 28-29 and Sept. 1-2. For the most part, economists expect another half-percentage-point rate increase in July and at least a quarter-point in September. The bank has already raised the Selic 15 times in the current tightening cycle, which started in 2013.
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