The Brazilian real declined today as the official report showed that food inflation slowed last month, reducing incentive for the central bank to raise interest rates as a measure to battle inflation.
Food and beverage prices grew 0.56 percent in February from the previous month, slower than the previous increase of 0.84 percent. At the same time, annual inflation was at 5.68 percent, exceeding analysts’ expectations. The Central Bank of Brazil has already slowed the pace of interest rate increases and may refrain from monetary tightening altogether in case inflation continues to fall.
USD/BRL went up from 2.3625 to 2.3680 as of 14:47 GMT today.
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