Brazil's central bank is likely to keep its policy interest rate at a record low at today's meeting as inflation concerns continue to outweigh worries over the flagging economy. However, the bank is expected to reveal its intention to hike the rate in the coming months.

The central bank has been under severe pressure to tame growing inflation pressures even as economic growth eased to disappointing levels in 2012. The challenge faced by policymakers is to bring down inflation to sustainable levels while ensuring that growth picked up.

The board of the central bank, led by president Alexandre Tombini, is widely expected to hold the benchmark Selic rate at 7.25 percent for the third successive time. The rate has been kept steady at the current level since October 2012, after being reduced in the preceding months, starting from 12.5 percent.

There is also speculation that at today's meeting the bank might hint at hiking the rate in the coming months as inflation in Latin America's largest economy climbed to 6.15 percent in January and stayed near the upper limit of its target.

RTTNews