(MENAFN - AFP) Brazil's Central Bank, which opened a two-day meeting Tuesday, is expected to hike its Selic base rate half a percentage point to rein in inflation, according to market analysts.
Most of the 100 analysts and operators consulted by the bank on a weekly basis said they expected the rate to go up from the current 9 percent to 9.5 percent.
The decision, expected to be announced by the bank's Monetary Policy Committee (COPOM) Wednesday, would mark the fifth consecutive rate increase this year in an adjustment cycle begun last April to combat surging inflation.
The analysts also said Copom should push the rate up to 9.75 percent at its last meeting of the year scheduled for late November
In April, the committee pushed the rate up by 0.25 points to 7.5 percent, the first increase since July 2011.
"The Central Bank will announce a 0.5 percentage point hike because it must continue combating inflationary pressure," said Marcelo Pereira, an analyst with the Tag Investimentos firm in Sao Paulo.
In August, 12-month inflation reached 6.09 percent, well above the official target of 4.5 percent.
Meanwhile, the industrial sector and labor unions have criticized the successive rate hikes, arguing that they risk hurting the country's economic recovery by making credit more expensive and discouraging investments.
Last year, GDP growth in the world's seventh largest economy was a paltry 0.9 percent, following 2.7 percent in 2011 and a sizzling 7.5 percent in 2010.
The Central Bank has cut to 2.5 percent its
GDP growth projection for this year, down from the 2.7 percent it forecast in June.