SAO PAULO (Reuters) – Brazil’s inflation slowed by more than expected in the year to mid-April, a reading the government is likely to see as backing its calls for an interest rate cut even as the central bank maintains a hawkish tone.
The country’s IPCA-15 inflation index eased to 4.16% from 5.36% in the previous month, government statistics agency IBGE said on Wednesday, coming in below market consensus of 4.20% in a Reuters poll of economists.
The latest data comes a day after central bank Governor Roberto Campos Neto ruled out an imminent interest rate cut, saying in a Senate hearing that the current rate was appropriate to address inflation concerns.
He said policymakers needed to ensure that inflation expectations were within the official targets, rebuffing calls from President Luiz Inacio Lula da Silva for lending costs to be lowered from their current six-year high of 13.75%.
Brazil has an inflation target of 3.25% for this year, but private economists expect the official index to reach 6.04% by the end of the year, according to a central bank survey.
In the month to mid-April, IBGE said, consumer prices in Brazil rose 0.57% after a 0.69% rise in the previous month. The index had been expected to rise 0.61%, according to the median forecast in a Reuters poll.
(Reporting by Gabriel Araujo; Editing by Tomasz Janowski)
