2014.12.0402:09:59UTC+00Brazil accelerates rate of interest rate hikes to hit inflation target

Brazil has doubled the rate of increases to its interest rates with the administration of Dilma Rousseff, the re-elected president, vowing to pull down inflation to 4.5% where it has been above of for the past four years.

The board of the Brazil’s central bank led by Alexandre Tombini unanimously voted today to hike up its benchmark Selic by 0.5 to 11.75% after previously increasing it by 0.75 on October 29th. Majority of the 55 economists surveyed by Bloomberg News forecast the increase, while the remaining predicted a larger 0.75% hike.

President Rousseff pledged to commit what she called “immense effort” to cool down the country’s inflation rate after winning Brazil’s last election in October by the slimmest margin since 1945. The country’s investment grade status and its economic growth has been threatened by the fast rise of prices for consumer goods along with its decade-high budget deficit.

Inflation climbed up to 6.59% in November to exceed the upper limit set by the central bank of 2.5% to 6.5% for the fifth time in 2014, according to the results of a Bloomberg News survey. Analysts see the rise in consumer prices slowing down to 6.3% this month before climbing up again next year to 6.5%.  Official statistics are expected to be released by the government on December 5th.