MercoPress. South Atlantic News Agency

Brazil's annual inflation drops to the lowest rate since 2010

The easing of inflation means that the Central bank most probably will further cut the Selic interest rate

Brazil's annual inflation eased to the lowest rate since 2010 and came very close to the government's long-missed target, leaving the door open for the central bank to accelerate the pace of interest rate cuts next week.

 Consumer prices as measured by the benchmark IPCA index rose 4.57% in the 12 months through March, in line with the median expectation of economists.

Prices rose 0.25% in March from the previous month, government statistics agency IBGE said on Friday.

The government targets inflation at 4.5%. Price rises have slowed rapidly since last year because of the economic recession, the deepest in the country's history.

The central bank has reiterated that lower inflation should allow it to step up its pace of interest rate cuts to 100 basis points per meeting at its next meeting on April 12. Brazil's
benchmark interest rate is currently at 12.25%.

Prices rose 0.96% in the first three months of the year, in the lowest quarterly inflation rate since the Brazilian Real was adopted as a currency in 1994, IBGE said.

According to the different items making up the CPI, Household articles, Apparel, Transport, and Communications were down, while Food and Beverage, Housing, Health and personal care, Education and Personal expenses, registered increases.