By Carla Mozee

Latin American equities were mixed Wednesday, with Brazil's benchmark edging higher before a decision on interest rates by the country's central bank.

Brazil's Bovespa was last up 0.3% at 38.890.02, paced by a 4% gain in shares of Telecomunicacoes de Sao Paulo (TSP).

Shares of the most interest-rate sensitive banks fell. Banco Itau (ITU) was down 1.4%, Unibanco (UBB) lost 2.1%, and Bradesco (BBD) fell 1.3%.

Banco Nossa shares, however, were up 0.14%. Banco do Brasil gained 0.9%. The federally-run bank's planned $5.39 billion purchase of Nossa Caixa, run by the Sao Paulo state government, was approved by the central bank on Tuesday.

Ahead of the rate decision, due Wednesday night, Brazil's census bureau said consumer prices rose 0.55% in February, compared with a 0.48% rise in January, because of a seasonal adjustment in tuition fees. The reading was above the estimate of 0.52% produced by a survey of analysts conducted by Dow Jones Newswires. Excluding the change, consumer prices rose 0.24%.

Inflation in February on a 12-month basis was 5.9%, compared with a 5.84% rate in January.

The consumer price figures arrived on the heels of Tuesday's report that the economy grew just 1.3% in the fourth quarter of 2008 from the year-ago period, below the forecast for gross domestic product growth of 1.64%.

"In all, [fourth-quarter] GDP results confirmed the dismal performance partly depicted by high frequency data observed in the last few months," wrote UBS Pactual analyst Claudio Ferraz in a note Wednesday.

The broker expects the central bank to cut the benchmark interest rate by a full percentage point from the current Selic rate of 12.75%.

A number of market professionals since last week have raised their bets for a rate cut of at least 150 basis points.

The iShares MSCI Brazil Index Fund (EWZ), an exchange-traded fund, slipped 0.14%.

In Mexico, the IPC was up 1.2% to 17,748.36, led by an 8% jump in shares of Grupo Financiero Banorte and a 5% rise in shares of broadcaster Grupo Televisa (TV).

Argentina's Merval slipped 0.6% to 987.08.

Chile's IPSA shed 0.5% to 2,468.05. The country's central bank is scheduled to release its decision on interest rates Thursday.