The largest ETF tracking Brazilian ETFs has plunged more than 20% the past three months and now the developing economy’s central bank has raised interest rates again in a bid to stem inflation.

Brazil raised its benchmark interest rate to a 16-month high of 9% on Wednesday, maintaining the pace of monetary tightening to fight inflation and rebuild investors’ confidence in Latin America’s largest economy, Reuters reports.

The iShares MSCI Brazil Capped ETF (NYSEArca: EWZ) was fractionally higher in U.S. morning trade Thursday.

Brazil ETFs have been among the worst performers in hard-hit funds that invest in emerging markets and so-called BRIC countries. [Corporate Bond Downgrades Could Pressure Brazil]

Its central bank has raised interest rates four times since April.

“Like other emerging economies, Brazil is struggling with a massive outflow of capital that has dragged down the value of its local currency and increased costs for companies indebted in US dollars,” The Telegraph reports. “That is especially worrying for Brazil, which was already suffering with high inflation, soft consumer demand and dwindling investor appetite as its economy struggles to return to the glory days of above 4% growth per year.”

iShares MSCI Brazil Capped ETF

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