By Rogerio Jelmayer

SAO PAULO--Consumer inflation in Sao Paulo, Brazil's largest city, slowed during the four weeks ended Feb. 7 amid a drop in food costs, leaving more room for the central bank to continue cutting interest rates.

The consumer-price index rose 0.18% in the period, decelerating from a 0.32% increase in January, the country's Fipe research foundation said Friday.

Food prices, which carry the greatest weighting in the index, fell 0.11% in the period, reversing from an increase of 0.16% previously.

Inflationary pressure is one of the challenges confronting the Brazilian government as it grapples with a lackluster economy.

Last month, Brazil's central bank lowered the Selic base rate to 13% from 13.75%.Economists say they expect the bank to continue its cycle of cuts in the coming months as inflation slows.

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

(END) Dow Jones Newswires

February 10, 2017 04:46 ET (09:46 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.