Inflation spurs ‘$urreal’ currency in Rio

A campaign that uses a fake currency – the "$urreal" – to implore residents in Brazilian city Rio De Janeiro to boycott stores charging "surreal" prices is drawing attention to tensions in the city.

The fake currency was proposed by resident Toinho Castro, who told Rio de Janeiro's biggest daily OGlobo: "The surreal has more to do with the reality of our lives".

(Read more: Can Brazil battle its economic headwinds?)

Buda Mendes | Getty Images Sport | Getty Images

Another resident, Patricia Kalil, then created the faux surreal, which features banknotes bearing the face of Spanish surrealist painter Salvador Dali.

The campaign has since spawned a Facebook page –entitled the "Rio $urreal – Don't Pay" – and has garnered over 200,000 Facebook page likes. It provides a forum for users to share pictures of overpriced goods or receipts the prices of which they deem to be "surreal."

The fake currency – or the "$urreal" – is a pun on the Brazilian currency the real which is currently losing value against the U.S. dollar due to tapering from the U.S. Federal Reserve. This increases the import costs on a number of everyday goods such as food and fuels.

(Read more: Brazil needs investors to reclaim BRIC growth)

However, it seems that the Fifa World Cup -- which Brazil is hosting in June – is also having an impact on prices in cities such as Rio de Janeiro.

"In some sectors of the service economy such as bars and hotels people are going to be inflating prices in the run up to the world cup" James Lockhart-Smith, principal Latin America analyst at Maplecroft, told CNBC in a telephone interview.

"While the World Cup has little to do with inflation overall, in certain cities you're going to see prices go up."

Similar frustrations were behind the huge demonstrations that swept across Brazil last year. They were sparked by rising fares, but fed into broader grievances such as corruption and the delivery of public services.

More generally, Brazilians are increasingly squeezed by persistent price rises in the country's services sector.

A recent survey by higher education institution Fundação Getulio Vargas (FGV) revealed that 74 percent of fifty services studied under the Consumer Price Index (CPI) showed inflation in the first two months of 2014. In January and February school tuition increased by 12.45 percent, meal prices at restaurants by 9.97 percent and medical appointments by 2.71 percent according to the Rio Times.

(Read more: Where now for Brazil after rates hiked for fifth month?)

Brazil's economy is dogged by persistent sticky inflation. In February, annual inflation accelerated to 5.65 percent according to the national statistics agency – stubbornly above the Central Bank of Brazil's (CBB) target of 4.5 percent.

Since the beginning of 2013 the Central Bank of Brazil has consistently raised interest rates in an effort to stem soaring consumer prices. At the end of February this year it slowed the rate rises to 0.25 percent a marked change from the previous six increases of a half point.

But as the country gears up for presidential elections to be held in October, the government is unlikely to enact any big policy changes.

"There won't be much happening in terms of macroeconomic policy before October. But there will be more determined efforts to bring down inflation after then," Lockhart-Smith told CNBC.