A person walks in front of the Central Bank of Brazil headquarters building in Brasilia, Brazil December 17, 2024. REUTERS/Adriano Machado

BRASILIA (Reuters) -Outstanding bank lending in Brazil continued to lose momentum in August, central bank data showed on Monday, as high interest rates helped cool activity in Latin America's largest economy.

Credit growth over the past 12 months slowed to 10.1% in August, down from 10.8% in July.

The central bank projected last Thursday that annual loan growth would ease further, ending the year at 8.8%.

While a steep slowdown from the 11.5% expansion seen in 2024, the forecast marked a slight upward revision from a previous estimate of 8.5%.

"The pace of credit expansion has started to decline, partly in response to the more restrictive monetary policy cycle," the central bank said in its latest monetary policy report last week.

Since September last year, the central bank has raised interest rates by a total of 450 basis points, taking the benchmark Selic rate to a nearly two-decade high of 15%. The rate was held steady at that level in the last two policy meetings.

On a monthly basis, outstanding credit rose 0.5% in August from July.

A broad measure of default rates on non-earmarked consumer and business loans rose to 5.4% from 5.2% the previous month, while average lending spreads widened to 32.3 percentage points from 31.8 points.

(Reporting by Marcela Ayres, Editing by Louise Heavens)