Reuters: Financial Services and Real Estate: UPDATE 1-Brazil rates to end 2012 at record lows-poll

Reuters: Financial Services and Real Estate Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

UPDATE 1-Brazil rates to end 2012 at record lows-poll May 7th 2012, 12:13 Mon May 7, 2012 8:13am EDT * Analysts cut end-2012 rate view to 8.5 pct * Inflation forecast for 2013 up to 5.56 pct from 5.53 pct (Adds details, background) By Silvio Cascione SAO PAULO, May 7 (Reuters) - Brazilian policymakers will likely slash interest rates to record lows after changing rules for savings accounts, a weekly central bank survey of economists showed on Monday. The country's benchmark interest rate is expected to end this year at 8.5 percent, the so-called Focus survey showed, down from last week's 9-percent forecast. Cutting one of the world's highest interest rates to single-digit levels is one of the top priorities for President Dilma Rousseff. A successful downshift on rates would be a major political achievement and would help address the high costs and economic distortions that have led Brazil's economy to stagnate unexpectedly in the past year. Finance Minister Guido Mantega announced new remuneration rules for savings accounts on Thursday. Their fixed rate of return was one of the biggest obstacles to the central bank's so-called Selic rate falling below the record low of 8.75 percent. A Reuters poll showed last week that most economists see the Selic rate staying in single-digits by the end of Rousseff's term in late 2014. The bank survey, which tracks weekly forecasts of the most-widely watched economic indicators in Brazil, also showed analysts foresee prices climbing 5.56 percent by the end of next year compared with last week's 5.53 percent prediction. The survey's results are the median forecast of analysts polled by the central bank at about 100 financial institutions. The market view for inflation this year remained unchanged at 5.12 percent. The central bank targets inflation of 4.5 percent annually, with a tolerance range of plus or minus 2 percentage points. The median estimate for economic growth for 2012 rose slightly to 3.23 from 3.22 percent, but analysts left unchanged their estimates for growth in 2013 at 4.30 percent. Consumer prices were seen rising 0.58 percent in April, according to the median forecast of the central bank survey. For the next 12 months, inflation will likely be 5.53 percent, unchanged from last week's prediction. (Reporting by Silvio Cascione; Editing by Chizu Nomiyama and Padraic Cassidy) Link this Share this Digg this Email Reprints

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