2017.09.2120:22:00UTC+00BRAZIL: Interest Rate Estimate Cut To 7% Per Year In 2017, 2018 - Central Bank

The benchmark interest rate in Brazil, known as Selic, is expected to reach 7% by year-end and remain at the same level through 2018, the Brazilian central bank said in its Quarterly Inflation Report.

In the previous report, the Brazilian central bank estimated that the Selic rate would close 2017 at 8.5% per year.

By the end of 2019, the central bank forecast that Selic rate would rise to 8% per year, remaining at that level until the end of 2020 and 2021.

"The projections also depend on considerations about the evolution of the necessary reforms and adjustments in the economy," said the central bank in the report.

Earlier this month, the Brazilian central bank's Monetary Policy Committee (Copom) cut the country's benchmark interest rate to 8.25%, from 9.25%, in line with market expectations, and signaled that it intends to keep loosening monetary policy in the next few meetings, but at a slower pace.

According to Copom, "for the next meeting, if the basic scenario evolves as expected, and because of the stage of the loosening cycle, the Committee sees as appropriate a moderate reduction in the magnitude of monetary easing."

For the October meeting of the Copom, market players point to a cut of 0.75 pp in the Selic, which means a reduction in the monetary easing cycle's rhythm, taking the rate to 7.50% per year.