BRASILIA, April 7 (Reuters) - Brazil's central bank will probably cut interest rates next week at the fastest pace since 2009, a Reuters poll showed on Friday, in its latest attempt to end a two-year recession as inflation continues to ease rapidly.
All 38 economists polled by Reuters expect the central bank to slash its benchmark Selic rate by 100 basis points on April 12 to 11.25 percent.
That would be the fifth cut in a row in a cycle that is expected to take interest rates to as low as 8.5 percent by the end of the year, according to the median forecast of the economists.
Some economists had considered until last week the possibility of an even larger rate cut as recent data frustrated hopes of an imminent economic recovery. Inflation also fell to the lowest since 2010, to 4.57 percent.
However, the bank, in its quarterly inflation report last week, said it was considering a "moderate" acceleration of the rate cuts, in a statement interpreted as closing the door for a cut of 125 or even 150 basis points.
"There are some uncertainties about the outlook and the main ones have to do with the pension reform," said Alessandra Ribeiro, an economist with consultancy firm Tendências.
"It does not make sense for the bank to be too aggressive now about the pace of rate cuts, or about the end-point of the cycle, and face the risk of having to raise rates in 2018."
The government's proposal to overhaul the country's pension system, seen as a crucial step to close record budget deficits and curb inflation, has met resistance from most lawmakers and will be watered down by President Michel Temer. The central bank has said the reform is important to ensure lower interest rates in the future.
What makes a 100-point cut still possible despite doubts over the pension reform is the fact that interest rates are still very high for an economy that experienced such a rapid drop in inflation, economists said.
"The central bank has signaled that it feels Brazil is still far from neutral rates, but there is a lot of uncertainty about where exactly that is," Morgan Stanley economists led by Arthur Carvalho wrote.
"The central bank can continue to move rates until it is sure they are well about neutral, and then most likely will move more cautiously." (Reporting by Silvio Cascione; Editing by Richard Chang)