September 16, 2019 / 1:13 PM / a month ago

Brazil inflation, interest rate outlook falls to new lows - survey

BRASILIA, Sept 16 (Reuters) - The outlook for Brazilian inflation and interest rates fell to new lows, a central bank survey of economists showed on Monday, with the benchmark Selic interest rate now expected to end next year at 5.00%.

The central bank’s policy-making committee, known as Copom, delivers its latest rate decision on Wednesday, and is set to cut the Selic by 50 basis points to a new record low of 5.50%, according to a Reuters poll of economists.

The central bank’s latest weekly FOCUS survey of around 100 financial institutions shows economists pricing in a further reduction of 50 basis points as policymakers battle to boost flagging growth and bring inflation back towards target.

In January, FOCUS surveys showed economists predicting 8.00% interest rates next year.

Monday’s survey also showed economists lowering their forecasts for end-2019 inflation for the sixth week in a row to 3.43%, exactly the rate of annual inflation recorded in August.

Last week, the government reduced its 2019 inflation forecast to 3.6% from 3.8%, even further away from the central bank’s official forecast of 4.25%.

$1 = 4.09 reais Reporting by Jamie McGeever; Editing by Catherine Evans

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