Brazil Inflation Accelerated in September as Food Prices Jumped Higher

By Jeffrey T. Lewis

SÃO PAULO--Brazil's inflation accelerated in September as the country's weak currency boosted exports of food, pushing prices higher.

Consumer prices increased 0.64% from August, the Brazilian Institute of Geography and Statistics, or IBGE, said Friday. Prices rose 3.14% from a year earlier. In August, prices rose 0.24% and increased 2.44% from a year earlier.

The Brazilian real has lost more than a quarter of its value against the dollar since the start of this year, making its agricultural output cheaper for foreign buyers. Poorer Brazilians have also been spending more because of aid payments the government is making to help people who have lost work because of the coronavirus pandemic, according to said Pedro Kislanov, the research director for the IBGE's inflation series.

"When more is exported, it reduces supply to the domestic market," he said.

The September figure pushed Brazil's consumer price index into the central bank's target range of 2.5% to 5.5% and closer to the 4% central point of the range, after spending months beneath the lower limit.

The slow price increases since the start of the coronavirus pandemic have allowed Brazil's central bank to cut its benchmark lending rate to a record low of 2%, and the bank said at its last meeting that it won't reduce monetary stimulus unless inflation starts to heat up.

Food price leapt 2.28% in September from August, after an increase of 0.78% in August, with the cost of staples soaring. The price of rice rose 17.98% in the month, and the cost of soy oil increased 27.5% from August, the IBGE said.

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

(END) Dow Jones Newswires

10-09-20 0835ET