* Darkening economic outlook prompts rate cut bets
* Brazil rate seen cut by 1 percentage point by year-end
* Chile poll sees 25 bps cut to 5.0 pct by February
By Alexandra Ulmer and Vanessa Stelzer
SANTIAGO/SAO PAULO, Sept 12 (Reuters) - Brazil and Chile are seen cutting rates in the next months in a reversal of monetary policies in place for much of the last year and a half, polls of analysts showed on Monday.
Rising Brazilian inflation is a worry for markets but Europe's debt crisis and the risk of a recession in the United States are likely to weigh more on policymakers in Brazil and Chile, according to the central bank polls.
Latin America's aggressive interest rate hikes were already seen as largely over, with central banks in Peru, Chile and Colombia pausing tightening cycles recently. Fellow emerging market India is also thought to be at the end of its own 18-month cycle.
Brazil, which has some of the world's highest interest rates and is grappling with price pressures, unexpectedly blazed the trail when it cut its Selic rate 50 basis points to 12 percent at the close of last month. And markets bet more cuts will follow. For more see [ID:nS1E78B069].
Analysts in a weekly central bank survey saw Brazil's Selic lending rate at 11 percent at the end of this year -- down from a forecast of 12.38 percent the previous week. The sharp drop was reflected in forecasts for next year -- also 11 percent, down from last week's view of 11.88 percent. [ID:nS1E78B069]
Brazilian President Dilma Rousseff has said repeatedly she wants borrowing costs to fall closer in line with those of global peers like India and China.
Chile's central bank is now seen cutting its own key rate by 25 basis points to 5.0 percent by February on a darkening economic outlook, a bank poll of analysts showed on Monday. They now see 5.25 percent by year-end, down from their August forecast of 5.5 percent. [ID:nS1E78B0BD]
"The region has to lower their interest rates to give the local economies a fresh boost," said Matias Madrid, chief economist with Banco Penta in Santiago. "But I don't think the cuts will be very aggressive." <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Factbox on global interest rates [ID:nGLOBAL] Factbox on Latin American rates [ID:nN1E76S1S9] Graphic on Americas economies r.reuters.com/nem92s ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Brazil's currency, the real BRBY, plunged to its lowest levels in more than nine months on Monday on concern world growth will slow and Brazilian inflation will rise. [ID:nS1E78B112]
Brazil's annual IPCA consumer price index is seen at 6.45 percent at year-end from a previous forecast of 6.38 percent, closer to the government's target ceiling of 6.5 percent for the year.
But inflation is seen easing in Chile, with analysts in the central bank's monthly poll forecasting a 3.3 percent rate in the 12 months to December, close to the central bank's 3.0 percent target and below their previous view of 3.6 percent.
Commodity prices, a source of inflation pressures in the region's export-driven economies and closely watched by central banks, fell sharply in early August before rising.
Emerging markets, many of which boast robust economic growth and solid fiscal fundamentals, have been hit by capital inflows from foreign investors that have triggered an export-damaging currency rally.
And policy makers from Brazil to India to China are battling strong price pressures. [ID:nI8E7K500H]
China's central bank said on Monday that inflation, which fell in August from a three-year high, is still too high and it would maintain its monetary policy settings despite heated debate among economists about a possible relaxation. [ID:nL3E7KC0B0] (Editing by Simon Gardner and Andrew Hay)