Inflation in Brazil slowed for the first time in two months in July as the impact of a May nationwide truckers' strike dimmed, reinforcing the view that a recent price spike would not last long.
Inflation in Brazil has eased for second consecutive month, which takes some pressure of the central bank to hike rates further. The Real has also gained pace last month after the central bank promised to do whatever it takes to stem the Brazilian currency's slide. The Real has strengthened to 3.84 per dollar after touching new all-time high of 4.247 per dollar only a couple of weeks ago.
Brazil announced it will scrap federal taxes on certain food staples and toiletries, the latest in a series of measures to curb prices after a surprise jump in inflation in February triggered alarm bells.
Brazil’s inflation slowed to its lowest in almost two years on temporary tax breaks for autos, paving the way for more interest rate cuts as the government tries to revive economic growth.
Brazil's central bank said Thursday it remained cautious about the outlook for prices due to uncertainties in the global economy, and hinted that more than just interest rates may be needed to bring inflation back into line with targets.