SAO PAULO - Private economists in Brazil are forecasting a deeper monetary policy easing next year as their inflation expectations accommodate within the central bank's target range, a weekly survey conducted by the monetary authority showed on Tuesday.

Economists now estimate the key Selic rate will end 2024 at 9%, down from the 9.25% projected a week ago. The benchmark rate currently stands at 11.75%, following 200 basis points of cuts since the central bank kicked off an easing cycle in August.

The authority has signaled fresh 50-basis-point rate reductions for its next two policy meetings, but has been noting that caution is still needed as long-term inflation expectations remain unanchored above its target.

The country's IPCA inflation index, according to the median forecast of the economists polled by the central bank, is expected to end next year at 3.91%, down from the 4.46% projected for this year. Brazil in 2023 had an inflation target of 3.25%, plus or minus 1.5 percentage points. That, however, will be tweaked next year to 3% with the same tolerance band, meaning that expectations are within the target range but above its center.

Economists maintained their inflation forecast for 2025 and 2026 at 3.50%, with the benchmark interest rate expected to end both years at 8.50%. 

(Reporting by Camila Moreira; Editing by Steven Grattan)