Brazil inflation in mid-November slips to second lowest in over 20 years
By Jamie McGeever
BRASILIA, Nov 22 (Reuters) - Brazilian inflation fell to the second lowest level in more than two decades, according to a mid-month measure of consumer prices released on Friday, a figure likely to give the central bank extra cover to reduce interest rates again next month.
The annual rate of Brazil's IPCA-15 consumer price inflation in the month to mid-November fell to 2.67% from 2.72% the month before, marking the lowest rate since September last year and the second lowest since March 1999.
The monthly rate rose to 0.14% from 0.09% in mid-October, but that was still the lowest rate for any month of November since 1998, government statistics agency IBGE said.
Both the annual and monthly rates of consumer price increases in mid-November were slightly below the median forecasts in a Reuters poll of economists, a further indication that the recent depreciation of the Brazilian real is not fueling inflation.
Central bank president Roberto Campos Neto said this week that the bank could reduce the benchmark Selic rate by 50 basis points to a new record low 4.50%, a repeat of its last three policy moves, although any further action will be carried out in a cautious manner.
Campos Neto also said that the real, which this week posted its lowest ever daily close against the dollar at 4.2061 per dollar, has not yet affected inflation or inflation expectations.
The central bank's official inflation target for this year is 4.25%, and next year's is 4.00%. Weak growth, high unemployment and a large degree of slack in the economy is pushing inflation well below target, allowing the central bank to slash borrowing costs.
($1 = 4.18 reais)
(Reporting by Jamie McGeever; Editing by Toby Chopra)
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