MNI BRIEF: Brazil Inflation 5.13% In August

Brazil's IPCA inflation was 5.13% in August versus the 5.09% consensus and down from 5.23% in July, Brazilian Institute of Geography and Statistics (IBGE) data showed Wednesday.

On a monthly basis, inflation turned negative, with prices declining 0.11%, compared with an increase of 0.24% in the previous month. It was the first deflation since August 2024.

The decline in prices was driven mainly by energy costs.

Inflation has remained above the upper limit of the Central Bank of Brazil's 3% target range, which allows for a deviation of 1.5 percentage points in either direction. The BCB kept its Selic rate on hold at 15.00% in July.

"The sharpest decline and strongest negative impact came from the Housing group (-0.90% and -0.14 p.p.), driven by the drop in residential energy (-4.21%), the item with the most significant impact on the index (-0.17 p.p.)," IBGE said. (See MNI INTERVIEW: BCB Likely To Start Cuts In December - Werlang)