BRASILIA, Aug. 3 (Xinhua) -- Brazil's financial market lowered its inflation forecast for this year from 5.12 percent to 5.03 percent, signalling improved expectations for price trends, the Central Bank of Brazil said Monday.

The bank's weekly Focus survey of analysts reflected the cooling effect of its restrictive monetary policy on inflation, with the forecast having stood at 5.30 percent four weeks earlier.

Brazil's target inflation is 3 percent annually, with a tolerance band of 1.5 percentage points on either side.

For 2027, analysts kept their inflation forecast unchanged at 4.22 percent.

The survey also showed stable expectations for the benchmark interest rate, which currently stands at 14.25 percent per year. Analysts expect the rate to fall to 13.75 percent by the end of the year and 12 percent by the end of 2027.

Regarding GDP, analysts maintained their 2026 economic growth forecast at 1.99 percent, but downgraded their 2027 forecast to 1.57 percent.

Meanwhile, the exchange rate forecast remained at 5.20 reals per U.S. dollar for the end of 2026 and 5.28 reals per dollar for 2027.

Foreign direct investment inflows are expected to reach 78.45 billion dollars in 2026 and 80 billion dollars in 2027.