Brazil boosts key interest rate

Brazil's Central Bank raised its key interest rate by half a percentage point to nine percent in a bid to curb surging inflation, it said. The bank's monetary policy committee said on Wednesday the move "will help set inflation on the decline and ensure that trend continues into next year." It was the fourth consecutive increase this year as the real has depreciated against the dollar in a volatile market roiled by expectations of tighter US monetary policy. In July, 12-month inflation reached 6.27 percent, below but very close to the upper limit of the government target of 6.5 percent. Investors keen to capitalize on the surging dollar are withdrawing their assets from emerging markets such as Brazil, Russia and India. Last week, the Brazilian currency plummeted to as low as 2.45 to the dollar, its lowest level since December 2008. The Central Bank responded with an intervention strategy in which it pledged to offer $500 million a day in currency swap contracts from Monday through Thursday and $1 billion on Fridays.