Brazil’s central bank has lifted interest rates to a six-year high of 12.75% to restrain inflation.
Inflation in Brazil, Latin America’s largest economy, was at a 12-year high in February of 7.4%. The government’s target is 6.5%.
Brazil’s economy had been one of the world’s fastest growing, but looks to have stalled in 2014.
Economists are now predicting that the economy will contract by more than 0.5% this year.
In a statement, Brazil’s central bank said: “In assessing the macroeconomic scenario and the outlook for inflation, the Copom [the bank’s monetary policy committee] decided unanimously to raise the rate by 0.5 percentage points, to 12.75%.”