SAO PAULO (Reuters) – Brazil’s IPCA-15 consumer price index posted in early February its largest monthly rise in almost three years, driving 12-month inflation to its highest since late 2023, as the central bank continues to tighten monetary policy.
Prices in Latin America’s largest economy were up 1.23% in the month to mid-February, government statistics agency IBGE said on Tuesday, up from 0.11% in the previous month. It was the highest reading since April 2022 though it landed below the 1.33% rise expected by economists in a Reuters poll
The overall increase was driven mainly by higher education and housing costs, IBGE said.
Annual inflation hit 4.96%, up from the 4.50% reported in January and the highest since October 2023. Market expectations were for it to reach 5.08%.
Brazil’s central bank targets inflation at 3%, plus or minus 1.5 percentage points, and has been hiking interest rates aggressively as policymakers vow to bring consumer prices back to the official goal.
The bank seems all but certain to deliver a third consecutive 100-basis-point increase to the benchmark Selic rate in March, taking it to a more than eight-year high of 14.25% in its bid to curb inflation.
(Reporting by Gabriel Araujo; Editing by Chizu Nomiyama)
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