Brazil 12-Month Inflation Accelerates to 3.52% in Month Through Mid-October

By Jeffrey T. Lewis

SÃO PAULO--Brazil's inflation rate accelerated in the month through mid-October as the cost of food continued to rise.

Consumer prices rose 0.94% in the period from Sept. 16 through Oct. 15, the biggest increase for the period since 1995, Brazil's Institute of Geography and Statistics, or IBGE, said Friday. Consumer prices rose 3.52% in the 12 months through mid-month, after rising 2.65% in the 12 months through mid-September.

Brazil's central bank holds its next-to-last monetary policy meeting for the year next week. The benchmark lending rate, the Selic, is at a record low of 2%, and economists surveyed by the central bank forecast it will stay at that level through the end of the year.

The central bank said in the minutes from the last meeting that it won't raise rates unless inflation expectations are "sufficiently close to the inflation target at the relevant horizon for monetary policy." The central bank's target for 12-month inflation is 4%, with a tolerance range of 1.5 percentage points in either direction.

The biggest rise in prices in the month was in the food category, which showed an increase of 2.24% in the month, up from 1.48% in the month through mid-September. The next-biggest increase was the 1.41% rise in the price of household goods, up from 0.79% a month earlier.

Within the food group, the price of soybean oil rose 22.34% as the weak Brazilian currency and good prices for soybeans on world markets spurred farmers to export more of the oilseeds. The cost of rice increased 18.48% in the month, and the price of tomatoes rose 14.25%, IBGE said.

Write to Jeffrey T. Lewis at [e-mail]

(END) Dow Jones Newswires

10-23-20 0832ET