The latest half-point rise, from 11.25 per cent, is the second since the start of the year and has led to short-term concerns for the Brazilian economy.
"Interest rates are going up and up yet inflation is likely to stay above five per cent this year," said Patrick Connolly who advises at AWD Chase de Vere.
"The interest rate hikes are stopping the rise of inflation but not making the problem go away, which is a concern."
However, Connolly believes the wider outlook for the Brazilian economy is good.
"There are plenty of public spending projects in Brazil and the currency is getting stronger and stronger, particularly after the second round of US quantitative easing," he added.
"While there are some short-term concerns, over the longer-term Brazil is taking steps to address problems at the heart of the economy and they are likely to come out of this very well."
A Trustnet study published on 18 February revealed that Latin American funds have outperformed the global emerging markets sector over three, five and ten years. Performance has waned more recently, however.
Performance of fund vs sector and average fund over 1-yr
Source: Financial Express Analytics
Over the last year only one of the 16 funds with more than 50 per cent exposure to Brazil – Threadneedle Latin American – has outperformed the IMA Global Emerging Markets sector average.
The fund has returned 8.19 per cent over one year, compared with 7.49 per cent from the emerging markets average and just 4.53 per cent for the average of the 16 Brazil funds.
The story is slightly better over six months, with three funds beating the emerging markets sector average – Gartmore Latin American and HSBC GIF Latin American Equity join Threadneedle Latin American – but in 2011 Brazil funds have lost investors money.
Harry Katz, who advises at Norwest Consultants, believes there is growth in the Brazilian market but has reservations about investing directly in the region.
"There are some world-class companies in Brazil, but it was one of the poorest performers in emerging markets last year," said Katz.
"I still prefer to sell the shovels rather than go digging. So whilst I have exposure to companies that do business in Brazil I’m not completely comfortable investing directly in Brazilian equities."
The views come on the back of data showing Brazilian industrial production has increased by 0.2 per cent, beating the forecast of a 0.7 per cent contraction.