BRASILIA (BRAZIL) - Brazil's central bank raised its benchmark interest rate by half a point to 14.25 percent, seeking to fight inflation during a major slump in the local currency.
Trade union members demonstrate in front of the headquarters of Brazil's Central Bank, in Sao Paulo, Brazil, on July 28, 2015 demanding a reduction of the basic interest rate
The bank's monetary policy committee COPOM decided in a unanimous vote to raise the Selic rate by 0.50 percentage points, the seventh consecutive raise.
The half-point bump was the largest boost in nine years.
On Friday, the real plunged to its lowest level against the dollar, adding to the woes of a country already hit by five years of low growth.
Analysts say Brazil's once booming economy suffers deep underlying illnesses, notably the massive corruption scandal unfolding at national oil company Petrobras and rippling across other top companies and into political circles.
It is also on the brink of recession.
For President Dilma Rousseff, weakened by government approval ratings of just 7.7 percent, things appear to be falling apart.
Another analyst, Andre Ferreira of Futura, said he didn't expect growth to return before 2018.
If so, that would add up to a seven-year stretch of zero or negative growth in a country that not so long ago had been hoping to ride the commodities boom to top rank economic status.
In 2014, GDP grew just 0.1 percent and this year, the government forecasts a 1.49 percent contraction, while the market expects even worse.