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Tuesday, March 11, 2008

Brazil Consumer Inflation February 2008

Brazilian inflation slowed in February for a second straight month, reducing the likelihood that the central bank won't be raising rates in the immediate future. Brazil's consumer prices rose 0.49 percent in February from January, the national statistic agency said today. Inflation, as measured by the benchmark IPCA index, decelerated from 0.54 percent month on month rate in January. The annual inflation rate in February remained above the central bank's 4.5 percent target for a second consecutive month, and the year on year rate was up to 4.61 percent in the 12 months up to February from 4.56 percent between January 2007 and January 2008.

The central bank ended its longest cycle of monetary easing last October after a surge in food prices coupled with rising consumer demand raised the chances inflation could accelerate above the 4.5 percent annual target. Policy makers voted last week to hold rates at a record low 11.25 percent for a fourth straight meeting.

Education prices, fueled by seasonal tuition increases, jumped 3.47 percent in February, accounting for almost half of the gain in the IPCA index last month.

Food and beverages inflation, largely responsible for putting the annual rate over target this year, slowed to 0.60 percent in February from 1.52 percent in January.

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