SAO PAULO, Sept 18 (Reuters) - Brazil's inflation rate likely held near an 18-year low through mid-September, a Reuters poll of economists showed on Monday, sparking bets that it may end the year below the central bank's target.
Consumer prices as measured by the IPCA-15 index probably rose 2.60 percent in the twelve months through mid-September, according to the median of 24 forecasts in the poll.
That would be the lowest mid-month reading since 1999, when Brazil adopted its current inflation-targeting regime, though a tad above the 2.46 percent rate at the end of last month.
Economists at UBS see "growing risks" that inflation will be below the bottom end of the central bank's 2017 target range of 4.5 percent plus or minus 1.5 percentage points. Even the highest forecast in the September poll lagged far behind that level, at 2.73 percent, with the lowest at 2.49 percent.
The central bank has missed its inflation target three times in the last two decades, but has never undershot it.
That could give it reason to slow the pace of interest rate cuts slightly when it meets again in October, after signaling a gradual end to monetary easing earlier this month.
Interest rate futures suggest traders are mostly betting on a 75 basis-point cut, with some bets on a 50 basis-point reduction.
An unanticipated decline in food prices allowed the central bank to cut the benchmark Selic rate by 100 basis points in each of its last four policy meetings, providing support to Latin America's largest economy as it exited its deepest recession in a century.
Still, economists said the economic recovery is too incipient to generate substantial price pressures despite recent signs of strength in the labor market. Services inflation, which is closely tied to demand, is expected to remain muted.
The IPCA-15 index likely rose 0.15 percent from the previous month, a smaller increase than the 0.35 percent monthly rise for mid-August, as the impact of a fuel tax hike faded. The 25 estimates ranged from 0.05 percent to 0.28 percent.
The data will be released on Thursday at 9 a.m. local time (1200 GMT), one hour after the central bank offers additional insight in its quarterly inflation report. (Reporting by Bruno Federowski; Editing by Paul Simao)