Brasilia, Jan 24 (IANS): The Central Bank of Brazil said the country's financial market raised its inflation forecast for both this year and the next, from 5.39 per cent to 5.48 per cent in 2023 and from 3.7 per cent to 3.84 per cent in 2024.

Target inflation for 2023 has been set at 3.25 per cent and at 3 per cent for 2024, with a 1.5 percentage point margin of tolerance in both cases.

According to the bank's weekly survey of the country's leading financial institutions, analysts maintained their forecast for the benchmark interest rate (known as Selic in Brazil) at 12.5 per cent by the end of the year, down from the current 13.75 per cent annually.

The rate is expected to then gradually decline to close 2024 at 9.5 per cent.

Analysts slightly upgraded their economic growth forecast for 2023 from a 0.77 per cent to a 0.79 per cent expansion in gross domestic product (GDP), but maintained their forecast for 2024 at 1.5 per cent.

Brazil's currency, which currently trades at 5.21 reals to the US dollar, is forecast to devalue slightly to 5.28 to the dollar by the end of 2023 and to 5.3 to the dollar in 2024.

Foreign direct investment in Brazil should reach $80 billion this year and $77.5 billion in 2024.