EMERGING MARKETS-Brazil real weakens to 10-year low on intervention uncertainty
RIO DE JANEIRO, March 3 (Reuters) - The Brazilian real closed at its weakest level in more than 10 years on Tuesday on concern about the country's deteriorating economic fundamentals and uncertainty about the future of a central bank currency intervention program. The real has slid about 2 percent since the central bank signaled on Friday that it would reduce the rollover pace of expiring currency swaps, derivatives that provide investors with hedge against currency losses. The move added uncertainty about the future of the central bank's currency intervention program, which is scheduled to continue at least until the end of March. That leaves the real even more vulnerable to risks such as a sharp deterioration in economic fundamentals and the spillover of a growing corruption scandal at state-run oil company Petrobras. "Brazil's economic and political situation is creating a lot of uncertainty among local and foreign investors," said Joao Paulo de Gracia Correa, a trader with Correparti brokerage in Brazil. Petrobras' shares closed 2.1 percent higher, however, after the oil company more than doubled the amount of money it plans to raise through asset sales. A source with direct knowledge of Petrobras' plan told Reuters that the company will focus on selling minority stakes as it seeks to retain control of its oil fields, power plants and utilities. Petrobras' shares boosted Brazil's benchmark Bovespa index , which closed 0.6 percent higher. In the opposite direction, Mexico's IPC stock index dropped 0.6 percent in its third consecutive session of losses on investor caution ahead of key U.S. economic data later in the week. Key Latin American currencies and stock indexes at 2110 GMT Stock indexes daily % YTD % Latest change change MSCI Emerging 985.83 -0.25 3.34 Markets MSCI LatAm 2592.25 -0.86 -4.14 Brazil Bovespa 51304.1 0.56 2.59 Mexico IPC 43600.37 -0.64 1.05 Chile IPSA 3966.17 0.64 2.99 Chile IGPA 19297.1 0.57 2.26 Argentina MerVal 9682.109 1.11 12.86 Colombia IGBC 10129.6 -1.61 -12.94 Peru IGRA 13374.89 -0.34 -9.59 Venezuela IBC 3751.39 0.49 -2.78 Currencies daily % YTD % change change Latest Brazil real 2.9260 -1.09 -9.18 Mexico peso 14.9955 0.13 -1.68 Chile peso 617 -0.04 -1.72 Colombia peso 2553.4 -0.73 -6.48 Peru sol 3.091 0.06 -3.62 Argentina peso 8.7375 -0.06 -2.15 (interbank) Argentina peso 12.88 1.01 8.70 (parallel) (Reporting by Bruno Federowski and Walter Brandimarte; Editing by Cynthia Osterman)
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