Brazil: Deflation in August

Brazil had a fourth-straight month of deflation in August as a rising currency cut the cost of foods and other imported goods, an index of consumer, wholesale and construction prices showed. Rio de Janeiro-based Getulio Vargas Foundation’s IGP-M index fell 0.65 percent in the month ended August 20, its biggest decline since a 1 percent drop in June 2003. The deflation, which is most evident in wholesale prices, suggests the central bank succeeded in reining in prices by raising interest rates nine times between September 2004 and May. Prices fell 0.34 percent in July, 0.44 percent in June and 0.22 percent in May.