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

(END) Dow Jones Newswires

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

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