Brazil February Inflation Rose to Fastest Since 2003

Brazil’s inflation through mid- February quickened to the fastest pace since April 2003, as a consumer-led recovery in Latin America’s biggest economy picks up speed.

Brazil’s consumer prices, as measured by the IPCA-15 index, rose 0.94 percent in the month through mid-February, the government’s statistics agency said today in Rio de Janeiro. That beat expectations for a 0.90 percent rise according to the median estimate in a Bloomberg survey of 27 analysts.

The yield on interest rate-future contracts for January 2011 delivery, the most traded on Sao Paulo’s stock exchange, fell two basis points to 10.34 percent at 7:13 a.m. New York time.

Traders are betting policy makers will raise the benchmark interest rate by at least 25 basis points at their next policy meeting on March 18. The central bank has kept the so-called Selic rate at a record low 8.75 percent since July in a bid to consolidate an economic recovery.

Brazilian inflation will accelerate to a 19-month high by year-end, exceeding the government’s 4.5 percent target, according to the median of about 100 estimates in a Feb. 19 central bank survey published yesterday.

Policy makers said they would “promptly adjust” interest rates should threats to the inflation target increase, the minutes of their Jan. 26-27 meeting show.

Analysts covering the Brazilian economy expected consumer prices to rise 4.51 percent the week before the central bank posted its minutes on Feb. 4, compared with 4.86 percent in the latest survey published yesterday.

Policy makers are reevaluating the rules for how much money banks need to keep in reserve after the requirements were eased amid the global credit crunch, bank chief Henrique Meirelles said yesterday.