Brazil Inflation Low

Brazil’s inflation, as measured by IPCA, ended the year at 3.14%, the lowest in almost a decade and among the lowest in the region in 2006. The rate was also well below the government’s target of 4.5%. The low rate means that the Central Bank has plenty of room to continue cutting the benchmark Selic rate at its next policy meeting on January 24. Inflation last year also fell significantly against the previous year: in 2005 prices rose by 5.69%.