BRAZIL: Economists Still See Main Interest Rate Falling To 8.50% By Year End

(RTTNews) - Economists polled by the Brazilian central bank kept their median estimate for the country's benchmark interest rate (Selic) by year-end unchanged at 8.50% for the twelfth week in a row. Meanwhile, the forecast for the average interest rate in 2017 fell to 10.22%, after spending four weeks at 10.28%. The median forecast for the Brazilian interest rate by the end of 2018 was cut to 8.25%, after 14 weeks at 8.50% per year, while the average interest rate expected for the next year was also cut to 8.25%, after seven weeks at 8.50%. At the end of May, the Brazilian central bank cut its main interest rate by one percentage point, to 10.25% per year - the lowest level since January 2014, when it was at 10%. The Brazilian central bank monetary policy committee said at that time that it is bound to slow down the pace of interest rate cuts at its next meeting, at the end of this month, to adjust to possible delays in economic reform bills approval in Congress. However, a few days after the most recent monetary policy decision, the national statistics office said that the 12-month inflation rate for May slowed down to 3.6% - the lowest level in ten years. The reading was almost a full percentage point below the 4.5% target, raising hopes that the central bank will keep the current rhythm of rate cuts. The next inflation data report is due next Friday.