Brazil's economic activity falls more than expected in September

BRASILIA, Nov 17 (Reuters) - Brazil's economic activity fell more than expected in September, central bank data showed on Monday, reinforcing expectations that clearer signs of cooling could open the door to monetary easing.

The IBC-Br index, a proxy for gross domestic product, slipped 0.2% from August, compared with a 0.1% decline forecast in a Reuters poll.

The index, which incorporates the central bank's estimates for farming, industry and services along with production-related taxes, showed only agriculture posting monthly growth.

In the third quarter, the index fell 0.9% from the previous three months. Over the past 12 months, it rose 3.0%, the central bank said. Official GDP data for the period will be released on December 4.

"There are widespread signs of weakening in domestic activity," said XP economist Rodolfo Margato, noting that all components posted negative readings in the third quarter.

The central bank has said economic activity is showing gradual moderation, though Governor Gabriel Galipolo has noted that several indicators still point to an economy running hot.

Earlier in November, policymakers kept interest rates at a near 20-year high of 15% for a third straight meeting, signaling they may need to hold them at that level for a "very prolonged" period to bring inflation to the 3% target.

A weekly central bank survey shows economists expect a first 25 basis-point rate cut in January.