Brazil raises rate for fifth time since April Brazil's central bank raised its benchmark interest rate for the fifth time in a row on Wednesday night, bringing it close to double digits and raising questions about how much longer the tightening cycle has left to run. The bank increased the Selic rate by 50 basis points to 9.5 per cent amid debate about whether it plans to continue the cycle at the next meeting in six weeks" time, which would bring the rates to the politically sensitive 10 per cent level. The monetary policy committee "evaluates that this decision will contribute to set inflation into decline and ensure that this trend persists in the upcoming year," it said, repeating the brief statement issued at its last meeting in August. The bank has been keen to underline the credibility of its inflation-targeting regime after perceptions of political interference earlier in the year. It reduced interest rates to an historical low of 7.25 per cent one year ago only to see inflation shoot above its target range of 4.5 per cent plus or minus 2 percentage points temporarily in June. Inflation has fallen again, hitting an annualised rate of 5.86 per cent in September and potentially buying the bank some breathing space in its tightening cycle. However, analysts said use of the same language in the terse statement that accompanies the monetary policy committee meeting decisions indicated that the bank would be likely to tighten by another 50 basis points in November. "This should be seen as a strong indication that the [monetary policy committee] will seriously consider hiking by another 50bp at the November 27 meeting," Goldman Sachs economist Alberto Ramos said in a research note. Inflation in September of items whose prices are freely determined by the market has been moderating but remained high at 7.4 per cent year on year, while inflation on items controlled by the government was declining and running at an "unsustainably" low 1.1 per cent. "In all, the central bank is still far from credibly re-anchoring current and expected inflation to the elusive 4.50 per cent target," he said.