Brasilia - Brazil's Central Bank announced Wednesday it had raised by 0.5 percentage points the benchmark interest rate to 9.5 percent, in an expected move to fight rising inflation.
Following a meeting of the bank's Monetary Policy Committee, or COPOM, on Tuesday, “this decision will contribute to lower inflation and ensure that this trend will continue next year,” the body said.
The panel's members unanimously approved the fifth consecutive rate increase this year, according to the bank.
In April, the bank raised the rate by 0.25 points to 7.5 percent from a record low of 7.25 percent that had been effective since October 2012.
Consumer prices in Brazil edged up 0.35 percent last month, fueled by higher food and transport prices, according to official data released this week.
Food and beverage prices rose 1.44 percent while those of transport were up 0.44 percent, according to the Brazilian Geography and Statistics Institute.
The government is determined to contain rising inflation but it must also avoid measures that could stifle the country's moderate economic growth.
In September, inflation over a 12-month period was 5.86 percent, below the 6.5 percent ceiling set by the government and below six percent for the first time this year.
The cumulative rate had been 6.09 percent in August.
COPOM's last meeting of the year is set for late November, and the market expects a further increase in the benchmark rate to 9.75 percent. - Sapa-AFP