Brazil's central bank raises rates again

[BRASÍLIA] Brazil's central bank on Wednesday raised its key interest rate to 13.25 per cent, as Latin America's largest economy fights to keep a lid on inflation despite a slowing economy.

The increase, the fifth consecutive one, was largely anticipated by analysts polled by the central bank.

"In assessing the macroeconomic scenario and the outlook for inflation, the Copom (the bank's monetary policy committee) decided unanimously to raise the rate by 0.5 percentage points, to 13.25 per cent," it said in a statement.

The hike puts rates at their highest level since January 2009.

Inflation in 2014 reached 6.41 per cent, just below the government's maximum tolerated rate of 6.5 per cent. The official annual target rate, however, is 4.5 per cent.

President Dilma Rousseff, who was re-elected in October, has responded by paring back the budget while promising to protect social programs for the working class.

After several years of booming growth, Brazil's economy has been slowing in recent years and growth in 2014 was a very muted 0.1 per cent.

AFP