UPDATE 2-Brazil cenbank sees no date for rate cut despite slow recovery
(Adds comments by economists, country background)
By Alonso Soto
BRASILIA Oct 4 (Reuters) - Brazilian central bank chief Ilan Goldfajn said on Tuesday policymakers have no set time frame to cut interest rates, even as industrial data suggested that Latin America's biggest economy may take longer than expected to emerge from recession.
Goldfajn told lawmakers at a congressional hearing that in order to cut benchmark interest rates from their current level of 14.25 percent, policymakers need to feel confident that inflation will continue to drop and hit the official target.
"The central bank does not have a pre-established time frame to ease monetary policy," said Goldfajn, who took the helm of the monetary institution in June under a new center-right government.
For months, Brazil's central bank has been under pressure to slash interest rates - which are among the highest in the world - in order to breathe life into the $2 trillion economy which is now in its second year of recession.
Following an easing in inflation in recent months, markets are pricing in a gradual reduction of 300 basis points in interest rates over the next year, starting from next month.
"I don't think he was backtracking from recent comments, but cautioning markets that may be exaggerating in their expectation for a drop in rates," said Newton Rosa, chief economist with SulAmerica Investimentos. Rosa expects the central bank to start easing rates in October with a 25 basis-point cut.
Lower interest rates could help spur the economy by making corporate and consumer borrowing easier. Continuación...