Brazil hikes key interest rate to target inflation

Brazil's Central Bank raised its benchmark interest rate Wednesday for the first time since July 2011, aiming to rein in inflation.

Many analysts and operators had expected the monetary policy committee would defer a hike until May.

But the monetary policy committee raised the benchmark rate by 0.25 points to 7.5 percent.

Analysts agree that the rate is likely to be pushed up to 8.5 percent by year's end.

In March, experts were alarmed when it was confirmed that 12-month inflation reached 6.59 percent, above the official target's upper limit of 6.5 percent.

The inflation surge coincides with sluggish growth.

In 2012, growth in the world's seventh largest economy slowed for the second year in a row, reaching an anemic 0.9 percent, its worst performance in three years.