Brazil hikes rates to 30%

BRAZIL'S central bank boosted its benchmark interest rate by almost 11 percentage points to stop an outflow of capital that is reaching $1bn a day.

The bank said its overnight rate, which it charges banks for loans, will rise to 29.75 per cent from 19 per cent from tomorrow. The rate will remain in effect until 30 September.

The move represents a sharp reversal in policy for the central bank, which had lowered the benchmark rate nine times this year in an effort to boost the economy.