Brazil consumer inflation drops in November, paves way for policy easing

Consumer price inflation in Brazil dropped during the month of November, paving further way for a monetary policy easing.

Brazil’s consumer price inflation fell to 6.99 percent, from 7.87 percent in the preceding month, data released by the Instituto Brasiliero de Geografia e Estatistica showed Tuesday. However, it remained higher than what markets had initially anticipated.

According to the Brazilian Central Bank’s (BCB) Governor Ilan Goldfajn, Slowing inflation and anchored inflation expectations provide room for the BCB to ease monetary policy, but only structural reforms can pave the way for sustainable rate cuts.

Inflation eased much more than expected in November, boosting market bets that the central bank could accelerate the pace of rate cuts in its January meeting.

Meanwhile, the USD/BRL traded flat at 3.34, down -0.19 percent.