UPDATE 3-Brazil hikes interest rate to 6-year high despite recession fears

miércoles 4 de marzo de 2015 20:07 GYT

(Adds rate moves in other major economies and context)

By Alonso Soto

BRASILIA, March 4 (Reuters) - Brazil raised interest rates on Wednesday to the highest level in six years, maintaining its aggressive pace of monetary tightening to fight inflation despite fears the economy is slipping into a deep recession.

The bank's monetary policy committee, known as Copom, voted unanimously to hike the benchmark Selic rate by 50 basis points for the third straight time. The move was expected by an overwhelming majority of economists and traders.

Brazil is one of the few major economies raising rates, with peers such as China and India loosening monetary policy to prop up economic growth.

The latest hike supports President Dilma Rousseff's drive to rein in inflation that surged to 12-year highs in mid-February and regain the trust of investors in Latin America's biggest economy.

Repeating exactly the same statement from its last meeting on Jan. 21, the central bank gave no clear clues on whether it is planning to slow the pace of the rate-hiking cycle or continue at the current pace.

Some interpreted the terse statement as a signal that the bank will go for another steep rate increase.

"The central bank is signaling that it will keep up the pace of monetary tightening," said Andre Perfeito, economist with Gradual Investimentos.   Continuación...