BRASILIA, May 5 (Xinhua) -- The Central Bank of Brazil's Monetary Policy Committee (Copom) on Wednesday raised the benchmark interest rate from 2.75 percent to 3.50 percent annually, marking the second consecutive increase of 0.75 percentage points.

The rate hike was in line with the expectations of most financial market analysts.

The new cycle of interest rate hikes, which began in March, aims to control inflation, which economists have forecast will reach 5.04 percent this year and 3.6 percent next year.

While the 2021 inflation forecast falls within the government's target rate of 3.75 percent with a margin of tolerance of 1.5 percentage points up or down, it is close to the 5.25-percent cap established by the National Monetary Council.

Market attention is now focused on the Copom's next steps and signs of how far the interest rate hikes may go.

In the bank's latest "Focus" survey of leading financial institutions, it is expected that the benchmark rate will end the year at 5.5 percent annually.

Analysts paid close attention to the central bank's decisions on inflation and the risk outlook linked to potential political changes, two of the key elements expected to guide monetary policy in the coming months. Enditem

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