BRASILIA (Reuters) -Brazilian President Luiz Inacio Lula da Silva said on Thursday that his government would reciprocate if U.S. President Donald Trump decides to impose tariffs on Latin America's largest economy, and called for mutual respect.

President Luiz Inacio Lula da Silva said Brazil is prepared to respond if Donald Trump places new tariffs on the country’s products, although he hopes to improve trade relations with the US instead.

Brazilian President Luiz Inacio Lula da Silva said Thursday that if US counterpart Donald Trump hiked tariffs on Brazilian products, he would reciprocate -- but that he would prefer improved relations over a trade war.

The bank’s monetary policy committee increased the benchmark rate by a full percentage point to 13.25%.

Brazil's central bank raised its benchmark interest rate by 100 basis points for the second straight meeting on Wednesday and signaled another hike of that size in March, leaving the door open for subsequent moves amid mounting inflationary pressures.

Gabriel Galipolo will chair his first interest rate decision as Brazil’s central bank governor on Wednesday with a clear, well-known mission: the board he now presides will raise the benchmark interest rate by a full percentage point for the second straight meeting.