BRASILIA (Reuters) - Brazil's inflation probably fell to its lowest annual rate since September 2012 in January, a Reuters poll showed on Monday, adding to investors' confidence about steep interest rate cuts by the central bank this year.


Consumer prices probably rose 5.41 percent in the 12 months through January, slowing from an increase of 6.29 percent in 2016, according to the median of 33 forecasts for the IPCA price index due out on Wednesday at 9 a.m. local time (1100 GMT).


The monthly inflation rate is expected to be 0.44 percent, the slowest for the month of January since 2007, according to the median of 35 estimates in the poll.


Brazil's inflation has come in below market forecasts in the past four months. The surprisingly fast slowdown in price rises has prompted the central bank to cut interest rates closer to single digits, boosting confidence among consumers and business after two years of a deep recession. <BRCBMP=ECI>


"With the fiscal reforms, the central bank acting to re-anchor inflation expectations and weather conditions allowing food prices to fall, fundamentals are finally prevailing," UBS economists led by Rafael de la Fuente wrote in a note.


Economists expect the annual inflation rate to fall below 4.5 percent, the center of the inflation target, in the second quarter. Most economists believe that will prompt policymakers to lower their inflation goal for the years ahead.

Estimates for the monthly inflation rate ranged between 0.37 and 0.58 percent, while forecasts for the 12-month rate varied between 5.34 and 5.56 percent.

(Reporting by Silvio Cascione; Reporting by Matthew Lewis)