Brazilian central bank raises basic rate

The Brazilian Central Bank on Wednesday raised its annual basic interest rate Selic from 9.5 to 10 percent. The decision was unanimous and represents the continuation of an "adjustment process of the interest rate, initiated in April," the bank's Monetary Policy Committee (Copom) announced at the end of its two-day meeting. It was the sixth consecutive raise in the Selic rate, which accumulates a rise of 2.75 percentage points this year. It was also the first time since early 2012 that the Selic rate reaches a two-digit value. With the rise, Brazil became the country with highest real interest rates (basic interest rate minus inflation rate) in the world. The Copom holds that increasing the basic interest rate is a strategy to maintain the inflation rate in the country, which accumulated to 4.38 percent in the first 10 months of 2013.