(Updates with rate decision and bank statement)
By Alonso Soto
BRASILIA, April 29 (Reuters) - Brazil opted for another steep interest rate hike on Wednesday to convince investors that the government is serious about reining in runaway prices despite fears of a recession.
In a unanimous vote, the central bank's nine-member monetary policy committee raised the Selic rate by 50 basis points for the fourth straight time to 13.25 percent, the highest since December of 2008.
An overwhelming majority of traders and analysts expected the 50-basis-point hike.
Brazil's benchmark interest rate now stands well above those of other major emerging market countries such as India and Turkey, both with rates at 7.5 percent.
While most major economies have cut rates to shore up growth, Brazil has raised borrowing costs by 225 basis points in the past six months.
The Brazilian central bank gave no clear indication it is ready to stop the rate-hiking cycle just yet.
The bank repeated the same laconic message in its post decision communique, leaving analysts guessing.
Although most analysts believe this could be the last rate increase of the year, a growing number acknowledged the bank could raise rates a bit more to counter possible shocks stemming from an imminent U.S. monetary tightening.
"I think this was the last increase, but the door is still open because the communique made no hint that the cycle is over," said David Beker, an economist with Bank of America Merrill Lynch in Sao Paulo.
The central bank is spearheading efforts by President Dilma Rousseff to restore credibility with investors after years of interventionist policies and lavish spending jacked up prices and threatened Brazil's investment grade rating.
Aided by aggressive fiscal tightening, the central bank has promised to bring 12-month inflation, which was running at 8.13 percent in March, to the 4.5 percent center of an official target by 2016.
Inflation expectations have remained high despite the recent tightening, but some price pressures are starting to ease. (Additional reporting by Marcela Ayres; Writing by Alonso Soto; editing by Andre Grenon and Andrew Hay)