UPDATE 1-Brazil's inflation eases, bolstering case for rate cut
(Adds details, market reaction) By Silvio Cascione BRASILIA, Sept 22 (Reuters) - Brazil's inflation rate eased more than expected in mid-September as food prices fell, underscoring bets on an imminent interest rate cut by the central bank. Consumer prices as measured by the IPCA-15 index rose 0.23 percent in the month to mid-September, down from 0.45 in the previous month, government statistics agency IBGE said on Thursday. The index had been expected to rise 0.35 percent, according to a Reuters poll. In the 12 months through mid-September, consumer prices rose 8.78 percent, down from 8.95 percent a month before, IBGE said. Although the 12-month inflation rate remained far above the official 4.5 percent target, the fast decline added to signs that companies are increasingly refraining from raising prices in the midst of a severe recession. Yields on interest rate futures <0#2DIJ:> were down, signaling a 90-percent likelihood of a rate cut on October 19 by the central bank. The bank has held its benchmark rate steady at 14.25 percent, its highest in a decade, but signaled it could start easing soon if inflation expectations fell. Food prices edged 0.01 percent down in the month to mid-September after a 0.78 percent increase in mid-August. Food prices had been rising at a surprisingly fast rate in previous months, partly due to bad crop weather. Transportation and communication prices also dropped, while the cost of personal expenses and healthcare rose. Mid-Septe mid-Aug mber ust - Food and beverages -0.01 0.78 - Housing 0.48 -0.02 - Household articles 0.25 0.34 - Apparel 0.49 -0.13 - Transport -0.10 0.10 - Health and personal care 0.53 0.87 - Personal expenses 0.60 0.85 - Education 0.25 0.90 - Communication -0.01 0.01 - IPCA-15 0.23 0.45 (Reporting by Silvio Cascione; Editing by Bernadette Baum)
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