SAO PAULO Brazilian President Luiz Inacio Lula da Silva said on Tuesday he expects the Senate to pass by the end of the year a proposed tax reform restructuring the country's complex consumption taxes, which gained approved from the lower house last week.

"I hope the Senate will repeat what the lower house did so we can get to the end of the year with a new tax policy approved," Lula said in a weekly live broadcast on social media.

The leftist leader noted people were becoming increasingly optimistic about Brazil's economic prospects, reiterating his calls on the central bank to lower interest rates as local inflation trends down.

"The central bank chief is a stubborn guy, but interest rates will start to fall soon," Lula said in a reference to central bank Governor Roberto Campos Neto, adding it was "inexplicable" to have benchmark rates at 13.75%.

Brazil's monetary authority has conducted one of the world's most aggressive tightening cycles to tame high consumer prices, but left the door open for an August rate cut if the positive inflation scenario continues.

(Reporting by Gabriel Araujo; Editing by Steven Grattan)