LatinNews Daily - 26 July 2023

In brief: Brazil registers mid-month deflation for July

* Brazil’s national statistics institute (Ibge) has released the latest mid-month consumer price index (IPCA-15), which registered a monthly inflation rate of -0.07% for July. This comes after the IPCA index registered deflation of 0.08% for June. Of the nine product categories measured, deflation was registered for four categories. The housing category saw the greatest deflation (-0.94%), within which electricity (-3.45%) saw a notable decrease in prices. The Ibge attributed the lower energy costs in July to the ‘Bônus de Itaipu’, a discount given to consumers when a positive annual account balance is registered by Empresa Brasileira de Participações em Energia Nuclear e Binacional (ENBPar) – the state-owned holdings company through which the Brazilian government manages its 50% stake of Itaipu Binacional, operator of the Brazilian-Paraguayan Itaipu hydroelectric dam. The continued inflation slowdown will add to the pressure on Brazil’s central bank (BCB) to lower the benchmark interest rate, currently set at 13.75%, during its next monetary policy committee meeting scheduled for 1-2 August.

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