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 central bank on Wednesday hiked its key interest rate to 13.25 percent in more bad news for leftist President Luiz Inacio Lula da Silva's government, which is struggling to curb high inflation.

Brazilian analysts say the tariffs announced by U.S. President Donald Trump against Canada, Mexico and China could cause a currency-related inflation surge in Latin America's largest economy, clouding the central bank's outlook for interest rates.