Consumer price inflation in Brazil was well contained in August, as forecast, reinforcing expectations of deeper interest rate cuts by the central bank as it tries to fire up economic growth.
Prices measured by the benchmark IPCA index , rose 0.11% in August, government statistics agency IBGE said. Inflation was 3.43% in the 12 months through August, up from 3.22% in the previous month but still well below the central bank's annual target of 4.25%.
Central bank chief Roberto Campos Neto said that inflation is well-anchored over the short-, medium- and long-term horizons, giving room to reduce interest rates further.
In July, the central bank cut its benchmark rate to a record low of 6.00%, an aggressive first move in a widely expected easing cycle and leaving the door open for more.
The bank's monetary policy committee, known as Copom, is widely expected to make another cut at its next rate-setting meeting, which concludes on Sept. 18.
Consumer price data showed housing was the main contributor to inflation in August, as in July, but three of nine categories showed deflation, including food and transportation costs.