Interest rates in Brazil are forecast to rise higher than anticipated as officials seek to rein in sharply surging inflation that is being exacerbated by the war in Ukraine.

Brazil’s central bank was already one of the world’s most hawkish, using a series of rate increases to lift its benchmark Selic interest rate from 2 per cent a year ago to 10.75 per cent last month. Economists expect the Selic to rise by a further 1 percentage point to 11.75 per cent on Wednesday, the highest level in five years.

Now a survey by Valor, a business media group, of 91 economists’ projections released this week found that the median forecast for the Selic has risen to 12.75 per cent by the end of the year, as Russia’s war in Ukraine has triggered a surge in commodities prices, particularly in oil and agricultural products. This is an increase from the previous consensus of 12.25 per cent.