Sales rose 8.7 percent in November from a year ago, the national statistics said today in Rio de Janeiro. It was the best annual result since October 2008, when sales advanced 9.8 percent. The increase in October was revised to 8.6 percent from 8.4 percent, the agency known as IBGE said.

“Domestic demand continues to be without a doubt the main driver of the Brazilian economy,” Newton de Camargo Rosa, chief economist at Sul America Investimentos, said in a phone interview from Sao Paulo. “Stronger demand will at some point force the central bank to raise rates.”

Brazilian central bankers may increase Brazil’s benchmark interest rate as early as March, according to Bloomberg estimates based on interest-rate future contracts. Rosa expects the monetary authority to start raising the so-called Selic rate in June, lifting it to 11 percent by year-end.

Yields on interest rate futures rose with the yield on the contract for January 2011 delivery, the most traded on Sao Paulo’s BM&F commodity and futures exchange, increasing 3 basis points to 10.33 percent at 7:50 a.m. New York time. The real fell 0.7 percent to 1.7693 per dollar from 1.7569 yesterday.

The year-on-year result for November was lower than the forecast for a 9.2 percent advance in a Bloomberg survey of 23 economists.

Monthly Gains

After stripping away seasonal factors, sales rose 1.1 percent from October, IBGE said. The month-on-month increase was better than the 1 percent rise forecast by 19 economists surveyed by Bloomberg.

Companhia Brasileira de Distribuicao Grupo Pao de Acucar, Brazil’s biggest retailer, and Wal-Mart Stores Inc. are among companies expanding their operations this year as economic growth accelerates to 5.8 percent from 0.2 percent in 2009, according to central bank estimates.

Wal-Mart, the world’s largest retailer, said in December it plans to boost its investment in Brazil by as much as 38 percent, or 2.2 billion reais ($1.25 billion), to open 110 stores next year. Pao de Acucar is shopping for a banking partner to provide credit to the more than 30 million clients it expects to add as a result of acquisitions.

Sales before the holiday season were strong as tax cuts, growing consumer credit and higher salaries increased demand for products such as home appliances and cars.

The central bank’s board, led by President Henrique Meirelles, kept the benchmark rate at a record low 8.75 percent in December for a third straight meeting to assure the recovery in Latin America’s biggest economy takes hold.

Traders are betting the interbank deposit rate will be at 8.944 percent on March 18, signaling they expect policy makers to raise the benchmark rate by at least 25 basis points in the same period.