Reuters: US Dollar Report: UPDATE 1-Analysts hold to view of rate cut next month in Brazil

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UPDATE 1-Analysts hold to view of rate cut next month in Brazil Sep 10th 2012, 12:01 Mon Sep 10, 2012 8:01am EDT * Analysts see Selic rate at 7.25 pct by year-end 2012 * Central bank to hike rates next year to 8.25 pct - survey * Analysts raise inflation forecasts for 2012 and 2013 SAO PAULO, Sept 10 (Reuters) - Brazil's central bank is expected to trim interest rates in October for the tenth time in a row before halting its year-long rate-cutting campaign to boost the sluggish economy, a weekly survey of economists showed on Monday. Analysts kept their year-end forecasts for Brazil's benchmark lending rate to 7.25 percent, down from a current rate of 7.50 percent, after the minutes of the latest central bank meeting showed policymakers remained confident that the pace of annual inflation would return to a downward trajectory after a temporary spike in food prices. The minutes, which were released last week, reiterated that any additional cut should be done with "maximum" caution. It also showed that policymakers were confident the sluggish economy would pick up speed in the coming months. A week ago, before the minutes were released, analysts in the central bank survey also saw the benchmark rate at 7.25 percent in October and at year end. In 2013, the Selic rate will likely rise back to 8.25 percent, down from a week-earlier estimate of 8.5 percent, the survey added. Brazil's benchmark Selic rate is currently at a record low. The poll results are the median forecast of analysts surveyed by the central bank at about 100 financial institutions. Analysts also raised their forecasts for Brazil's consumer price index to 5.24 percent and 5.54 percent in 2012 and 2013, from 5.20 percent and 5.51 percent, respectively seen a week earlier. Forecasts for Brazil's economic growth this year were lowered to 1.62 percent from 1.64 percent a week before, according to the survey. That would be the weakest annual performance since 2009 and a sharp slowdown from 7.5 percent growth two years ago. In 2013, Brazil's gross domestic product is expected to grow by 4 percent, according to the survey. Consumer prices were seen rising 0.44 percent in September from the previous month, up from 0.41 percent seen a week earlier. Link this Share this Digg this Email Reprints

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