(Bloomberg) -- Brazil held its benchmark interest rate at a record low as policy makers await the advance of a crucial pension overhaul proposal in Congress amid a feeble economy and tame inflation.

The bank’s board, led by its President Roberto Campos Neto, on Wednesdaykept the Selic unchanged at 6.50% in a decision expected by all but one of the 39 economists in a Bloomberg survey. Officials have held borrowing costs steady for over a year.

In the statement accompanying the decision, the committee said that while the external scenario was less adverse, the risks associated with a global economic slowdown remained. Domestically, progress on reforms is “essential” for a fall in structural interest rates and for a sustainable economic recovery, it added.

Brazilian policy makers have stuck to their cautious stance even as central banks from India to Russia rush to shore up their economies by cutting borrowing costs. Domestically, growth expectations have plunged and inflation is seen remaining at or below target in the foreseeable future. Still, a fresh round of political bickering has cast a shadow over the government’s pension reform proposal, which the central bank sees as crucial to keeping a lid on consumer prices.

“The biggest uncertainty that still lies ahead is on the political front,” Carlos Kawall, chief economist at Banco Safra and one of the top Selic forecasters in Bloomberg surveys, said before the decision. “Since the last meeting, we have seen the economy weaken and inflation stay under control, and with a few more advances in pension reform the central bank could start cutting.”

President Jair Bolsonaro’s administration is seeking to save nearly 1 trillion reais ($259.1 billion) in a decade by toughening access to pension benefits. The flagship bill is currently being debated in a lower house committee and may go to a floor vote by early next month.

(Adds detail from post-meeting statement in third paragraph.)

To contact the reporter on this story: Mario Sergio Lima in Brasilia Newsroom at mlima11@bloomberg.net

To contact the editors responsible for this story: Juan Pablo Spinetto at jspinetto@bloomberg.net, ;Walter Brandimarte at wbrandimarte@bloomberg.net, Matthew Malinowski

©2019 Bloomberg L.P.