By Silvio Cascione
BRASILIA (Reuters) - Brazil's inflation rate eased more than expected in mid-September as food prices fell, underscoring bets on an imminent interest rate cut by the central bank.
Consumer prices as measured by the IPCA-15 index <BRIPCA=ECI> rose 0.23 percent in the month to mid-September, down from 0.45 in the previous month, government statistics agency IBGE said on Thursday. The index had been expected to rise 0.35 percent, according to a Reuters poll.
In the 12 months through mid-September, consumer prices rose 8.78 percent <BRCPIY=ECI>, down from 8.95 percent a month before, IBGE said.
Although the 12-month inflation rate remained far above the official 4.5 percent target, the fast decline added to signs that companies are increasingly refraining from raising prices in the midst of a severe recession.
Yields on interest rate futures <0#2DIJ:> were down, signaling a 90-percent likelihood of a rate cut on October 19 by the central bank. The bank has held its benchmark rate steady at 14.25 percent, its highest in a decade, but signaled it could start easing soon if inflation expectations fell.
Food prices edged 0.01 percent down in the month to mid-September after a 0.78 percent increase in mid-August. Food prices had been rising at a surprisingly fast rate in previous months, partly due to bad crop weather.
Transportation and communication prices also dropped, while the cost of personal expenses and healthcare rose.
(Reporting by Silvio Cascione; Editing by Bernadette Baum)