Bloomberg News

Brazilian Swap Rates Decline on Inflation Outlook; Real Climbs

October 07, 2013

Brazilian swap rates fell as economists surveyed by the central bank lowered their 2014 inflation outlook, adding to wagers policy makers will signal that the pace of increases in borrowing costs will slow.

Swap rates due in January 2017 declined three basis points, or 0.03 percentage point, to 11.25 percent at 11:08 a.m. in Sao Paulo, the lowest level on a closing basis since Sept. 25. The real appreciated less than 0.1 percent to 2.2110 per dollar.

Economists lowered their forecast for annual inflation at the end of 2014 to 5.95 percent from 5.97 percent, according to the median forecast of about 100 analysts in a central bank survey published today. Inflation was slower than 6 percent in the year through mid-September for the first time in nine months, the national statistics agency reported last month.

“I have no reason to question the majority view that they will raise to 9.75 percent this year and probably not going to go further than that,” Siobhan Morden, the head of Latin America fixed income at Jefferies Group LLC, said in a telephone interview from New York.

To contact the reporters on this story: Blake Schmidt in Sao Paulo at bschmidt16@bloomberg.net; Josue Leonel in Sao Paulo at jleonel@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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