By Rogerio Jelmayer

SAO PAULO--Brazil's inflation as measured by its consumer-price index moderated through mid-December, reinforcing signs that inflationary pressures across Latin America's largest nation are slowing and leaving the door open for more interest rate cuts by the central bank.

The rolling 12-month consumer-price index, ended in mid-December, increased 6.58% from 7.64% in mid-November. Despite the slowdown, the rise was above the 6.5% increase ceiling set by the central bank.

Meanwhile, the midmonth consumer-price index, the IPCA-15, rose 0.19%, compared with a 0.26% increase in midmonth November, the Brazilian Institute of Geography and Statistics, or IBGE, said Wednesday.

The latest index, which refers to price increases fromNov. 15 to Dec. 13, came below economists' expectations of an acceleration between 0.21% and 0.40% for the period.

Inflationary pressure is one of the challenges confronting Brazil's government as it grapples with the poorly performing economy. Gross domestic product is expected to contract 3.5% this year, according to country's finance ministry.

Last month, the Brazilian central bank reduced its Selic base rate to 13.75% from 14%. Economists expect the bank to continue its cycle of reduction in the next months.

Write to Rogerio Jelmayer at rogerio.jelmayer@wsj.com

(END) Dow Jones Newswires

December 21, 2016 06:47 ET (11:47 GMT)

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