Brazil’s official rate of inflation rose to a near 10-year high in February, after recent increases in fuel taxes pushed prices higher than expected, the government's official statistics agency, the IBGE said Friday.
The IPCA, or consumer price index, stood at 1.22 percent in February, the IBGE said. January saw a rate of 1.24 percent.
In the 12 months to February, it represents inflation of 7.7 percent -- the highest rate posted since May 2005, when the figure reached 8.05 percent. In January, the annualized rate was 7.14 percent.
The government's official target for inflation is 4.5 percent, with a tolerance band of two percentage points higher or lower.
Increases in state-regulated prices, particularly fuel and energy, were the main pressures on prices after they grew significantly more expensive.
Electricity went up by 3.14 percent and gasoline increased 8.42 percent after hikes to two levies on fuel went into effect Feb. 1.
"Gasoline drew our attention most this February as it went over 8 percent," said Eulina Nunes dos Santos, IPCA coordinator at the IBGE, quoted by the G1 news portal. "The impact of the taxes was extremely strong and was felt at the pumps, and consequently weighed on consumers' pockets even more than we could have predicted."
Tuition fees, which rose by 5.83 percent, usually have the biggest impact on prices in February, Dos Santos added.
In a bid to curb rising inflation, Brazil's central bank announced late Wednesday the fourth consecutive rise in interest rates, boosting the benchmark Selic rate by 0.50 basis points to 12.75 percent.
Analysts surveyed by the bank last week estimated 2015 would end with an annual inflation of 7.47 percent.
With Brazil's currency, the real, weakening significantly against the U.S. dollar, the scenario is being complicated further still, particularly in terms of imported products bought in dollars.
By 11:20 a.m. Friday in São Paulo (GMT1420), $1 bought 3.051 reais, up 1.31 percent from Thursday's closing rate of 3.0115.
It was the first time the currency closed above 3 reais against the dollar since 2004.