SAO PAULO (Reuters) -Brazil’s monthly inflation slowed for the fourth time in a row in June, but the annual rate ticked up and remained well above the official goal, data showed on Thursday.
Consumer prices as measured by the benchmark IPCA index rose 0.24% in June, government statistics agency IBGE said, down from the 0.26% increase reported in the previous month but above the 0.20% rise expected by economists polled by Reuters.
Prices were up 5.35% in the 12 months through June, IBGE added, exceeding the 5.32% registered in May. Economists had also expected the June rate to come in at 5.32%.
Brazil’s central bank has an inflation target of 3%, plus or minus a margin of 1.5 percentage points, which was exceeded for the ninth consecutive month.
Central bank governor Gabriel Galipolo is set to release an open letter to the country’s monetary council later in the day to justify missing the target, as per Brazilian rules.
Galipolo on Wednesday reaffirmed that the bank is committed to bringing the rate back to the goal after policymakers last month hiked interest rates to 15%, the highest since July 2006, and signaled they would keep them steady for a prolonged period.
“There’s little in the Brazilian June CPI print that changes our view that last month’s hike marked the end to Copom’s tightening cycle,” Capital Economics emerging markets economist Kimberley Sperrfechter said.
“But a lot will now depend on how the trade dispute with the U.S. plays out and what happens to the real.”
(Reporting by Gabriel AraujoEditing by Andrew Heavens)
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