BRASILIA (Reuters) - Brazil raised interest rates to the highest levels in more than six years on Wednesday, extending a tightening campaign and leaving the door open for more hikes despite concerns that steep borrowing costs could deepen an expected economic recession.

The central bank's monetary policy committee, known as Copom, decided unanimously to hike its benchmark Selic rate by 50 basis points to 13.75 percent as expected by an overwhelming majority of market players. It is the highest Selic rate since January 2009.

Leading one of the world's boldest rate-hiking cycles to tame inflation running at an 11-year high, the central bank is succeeding in regaining credibility with investors but risks damaging an economy expected to suffer its worst recession in 25 years.

The bank may further increase rates to make good on its promise to bring inflation back to the 4.5 per cent center of the official target range by late 2016.

In the decision statement, the bank repeated the same laconic message released in its previous one, leaving analysts guessing.

"It is the right decision and another step to rebuild policy credibility," said Alberto Ramos, senior economist with Goldman Sachs in New York. "We are coming relatively close to the end of the cycle, but the exchange rate and activity will determine whether we need one or two more hikes in this process."