Nov. 13 (Bloomberg) -- Brazil’s retail sales rose for the fifth straight month in September, largely in line with expectations, boosting speculation that the central bank will be able to extend its current rate pause.

Retail sales rose 5 percent in September from a year ago, the national statistics agency said. Economists expected a 4.9 percent climb, according to the median of 29 forecasts in a Bloomberg survey. From a month earlier, sales rose 0.3 percent, compared with the survey’s 0.4 percent median forecast.

“Sales will show accommodation in the first half of 2010, helping interest rates to remain stable for some time,” Flavio Serrano, senior economist at Banco Espirito Santo de Investimento SA said in a phone interview.

Since taking office almost seven years ago, the administration of President Luiz Inacio Lula da Silva has created a “robust” domestic market in Latin America’s biggest economy, central bank President Henrique Meirelles said today in Sao Paulo.

Domestic demand helped lift Brazil out of its first recession since 2003 in the second quarter of this year. The government cut taxes on consumer goods and policy makers cut interest rates to a record low 8.75 percent in a bid to fuel a recovery amid the global economic slowdown.

The real was little changed at 1.7376 per dollar at 8:55 a.m. New York time from 1.7359 yesterday.

To contact the reporters on this story: Adriana Brasileiro in Rio de Janeiro at abrasileiro@bloomberg.net Iuri Dantas in Brasilia at idantas@bloomberg.net

Last Updated: November 13, 2009 09:05 EST