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.

BRASILIA (Reuters) - 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.

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.