UPDATE 1-Brazil cenbank sees low 3rd qtr inflation – report

* Worsening global economy to help curb Brazil inflation

* Central bank said it would not comment on report
(Adds central bank comment, background )

SAO PAULO, Aug 19 (BestGrowthStock) – Brazil’s central bank expects
inflation in the country will be below market expectations in
the third quarter, Valor Economico newspaper reported on
Thursday, citing unnamed central bank officials.

The bank also sees a worsening of the global economy
helping to curb price pressures in the Brazilian economy, the
daily added.

Economists in a weekly central bank survey released on
Monday forecast that the benchmark IPCA inflation index —
which the central bank uses as a gauge when setting interest
rates — would rise 5.19 percent in 2010.

The analysts, however, trimmed their view on growth for the
economy, signaling pressure on consumer prices may ease in the
months ahead. [ID:nN16252245]

A low-inflation outlook will probably prompt policymakers
to keep the benchmark Selic rate unchanged at 10.75 percent
when they meet in two weeks, Valor reported, citing the unnamed
central bank sources.

The central bank said it does not comment on stories with
anonymous sources.

Yields on Brazilian interest rate futures contracts
(0#DIJ:: ) have been falling in recent weeks as investors pared
bets on future rate hikes in the country because of a slowdown
in global growth and as inflation remained flat for two
straight months.
(Reporting by Elzio Barreto; Editing by W Simon )

UPDATE 1-Brazil cenbank sees low 3rd qtr inflation – report