Brazil Slower Price Increases Won’t Prompt Rate Halt, Valor Says

Brazil’s central bank will continue to raise the benchmark interest rate to ensure consumer price increases meet its target even though monthly inflation will slow in coming months, Valor Economico reported, citing a government official it didn’t identify.

The government expects the month-on-month inflation rate will drop in the four months from May, the Sao Paulo-based newspaper said. Still, it will be too early to declare victory, given that year-on-year inflation will continue to accelerate and is likely to peak in August, Valor cited the official as saying.

The central bank estimates the fight against inflation will slow annual economic growth to 4 percent or less in 2011 and 2012 from 7.5 percent last year, Valor reported.

A spokesman at the central bank, who can’t be identified because of internal policy, declined to comment when contacted by Bloomberg.