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Brazil’s Inflation: Will the Central Bank Tighten Further?
- The IPCA-CPI, the key inflation series tracked by the Brazilian central bank, posted annual inflation of 6.3% Y/Y in July. On a monthly basis, the index was practically flat. These results were perfectly in line with Consensus, and with DE estimates.
- This is not the end of the central bank’s tightening, but rather than pointing to a continuing, deeper, open-ended process, the data point to the likelihood of moderate (50-to-75 basis points) additional rate increases during the remainder of 2013.