Nov. 17 (Bloomberg) -- Merrill Lynch cut its 2009 economic growth forecast for Brazil to 2.9 percent, from a previous estimate of 3.1 percent, as scarcer credit and the lagging effect of monetary tightening weigh on consumer demand.

Merrill Lynch, in a report, said the ``massive depreciation'' of the local currency that is stoking inflation should force the central bank to keep interest rates on hold to June 2009 instead of a previous estimate of April.

To contact the reporter on this story: Joshua Goodman in Rio de Janeiro jgoodman19@bloomberg.net

Last Updated: November 17, 2008 08:52 EST