Brazil hikes base rate in line with market expectations

In a move expected by markets, Brazil's central bank on Wednesday hiked its base rate by half a percentage point to 10 percent in order to rein in high inflation during a period of sluggish economic growth.

The unanimous decision by the bank's monetary policy commission (Copom) to raise the rate came after a two-day meeting, the last of the year.

The committee said the move comprised "continuity in the adjustment process of the base rate embarked upon in the meeting of April 2013," when the rate stood at 7.25 percent.

The sixth straight monthly rise since then came barely 11 months before presidential elections in which leftist President Dilma Rousseff is tipped to win re-election.

The bank is seeking to keep a lid on inflation, which in June reached 6.7 percent on an annualized basis, above the 6.5 percent upper limit of the official range.

Rousseff had pushed for lowering the rate, among the highest in the world, but the central bank was forced to bring them back up in the face as inflation stayed doggedly above her administration's target.

The country's GDP grew a modest 0.9 percent in 2012. The government and market analysts are banking on a 2.5 percent expansion this year and 2.1 percent in 2014.