Brazil's central bank raised its benchmark Selic rate by a further 50 basis points to 13.25 percent, as widely expected, and said in a brief statement that the decision was based on an evaluation of the macroeconomic scenario and the outlook for inflation.
The Central Bank of Brazil has now raised its policy rate by 150 basis points this year and by 600 points since embarking on a tightening cycle in April 2013 to force inflation back to the bank's target range of 4.5 percent, plus/minus 2 percentage points.
The decision by the central bank's monetary policy committee, known as Copom, was unanimous and no bias was indicated.
Brazil's headline inflation rate rose to 8.13 percent in March from February's 7.7 percent.
In the minutes from the Copom's meeting in March, when it also raised the rate by 50 basis points, it said that movement in inflation toward its 4.5 percent target in 2016 had strengthened, but "progress made in the fight against inflation - like benign signals stemming from medium and long-term expectations indicators - has not been sufficient yet."
In its quarterly report from last month, the central bank raised its 2015 inflation forecast to 7.9 percent from 6.1 percent previously but cut the 2016 forecast to 4.9 percent from 5.0 percent.
In 2014 Brazil's inflation rate averaged 6.3 percent and the International Monetary Fund (IMF) forecasts 7.8 percent this year.
In its latest outlook, the IMF cut its forecast for Brazil's economic growth this year to a 1.0 percent contraction from a previous forecast of 0.3 percent growth due to tighter fiscal and monetary policies and lower investments by scandal-hit, state-run oil company Petrobras.
In 2014 Brazil's economy expanded by only 0.1 percent after 2.7 percent growth in 2013.