UPDATE 3-Brazil's inflation tumbles to lowest for September since 1998
(Adds central bank chief and finance minister comments)
By Silvio Cascione and Christian Plumb
BRASILIA/WASHINGTON Oct 7 (Reuters) - Brazil's inflation rate fell unexpectedly in September to its lowest for the month since 1998, paving the way for the central bank to ease cripplingly high interest rates and help pull the economy out of a harsh recession.
Consumer prices measured by the benchmark IPCA index rose 0.08 percent in September, statistics agency IBGE said on Friday. That was below all 24 market forecasts in a Reuters poll and the lowest monthly reading since July 2014.
Prices rose 8.48 percent in the 12 months through September after an increase of 8.97 percent in the previous month.
The data fueled expectations that the annual inflation rate could plunge to the official 4.5 percent target by the end of 2017 even if the central bank starts cutting interest rates at its next policy meeting on Oct. 19. Yields on interest rate futures <0#2DIJ:> dropped across the board after the data was published.
Still, central bank chief Ilan Goldfajn sought to ease any market furor by warning that the pace of disinflation continues uncertain despite the sharp drop in September.
"The evolution of prices indicates an ongoing disinflationary process, but the speed of disinflation is still uncertain," Goldfajn told investors on the sidelines of the International Monetary Fund and World Bank fall meeting in Washington.
Finance Minister Henrique Meirelles also struck a cautious tone, telling reporters in Washington that it remains to be seen if the downward trend would be long-lasting. Continuación...