Brazil’s central bank said annual inflation will run above the tolerance range for the next six months, as food prices rise significantly and services costs remain elevated despite aggressive interest rate hikes.

Brazil's central bank on Tuesday labeled the unanchoring of inflation expectations and the country's overheating economy as "highly relevant" inflationary risks, adding that concerns over potential pressures from a weaker currency persist.

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

Brazil’s gross debt closed 2024 at 76.1% of GDP (Gross Domestic Product), an increase of 2.2 percentage points over the year. In December, the gross debt balance reached R$ 9 trillion ($1.6 trillion). The data was released by the Central Bank this Friday (31).

Brazil's central bank on Tuesday stressed that cooling economic activity is crucial for bringing inflation to target, while labeling the unanchoring of inflation expectations and an overheating economy as "highly relevant" inflationary risks.

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.