EMERGING MARKETS-Brazil's real drops after central bank reduces support

jueves 11 de junio de 2015 09:17 GYT

SAO PAULO, June 11 (Reuters) - The Brazilian real
  sank on Thursday after the central bank slowed the
rollover pace of expiring currency swaps, signaling its
discomfort with the real's recent gains.
    Other Latin American currencies were largely unchanged,
while equities markets moved slightly higher.
    Brazil's central bank said late on Wednesday it will auction
as many as 6,300 currency swaps to roll over similar contracts
that mature on July 1, down from a previous pace of 7,000
contracts per day. 
    Currency swaps are derivatives that support the real by
providing investors with protection against currency losses.
    The real had gained about 2 percent in the month through
Wednesday, with investors encouraged by higher commodities
prices and views that a recent dollar rally was overdone.
    The central bank also released the minutes of its last
rate-setting meeting before the market open on Thursday, in
which it signaled concerns over the likelihood of lowering
inflation back to the 4.5 percent official target by the end of
    "It seems that despite the very challenging inflation
picture the authorities do not want to fall in the old trap of
using the real as an instrument to control inflation," wrote
Alberto Ramos, chief Latin America economist with Goldman Sachs
in New York. "It seems that they are increasingly looking at the
real as an instrument to help the economy and facilitate the
needed macro adjustment."
    Investors responded by driving up yields on Brazilian
interest rate futures <0#DIJ:> across the curve on the outlook
for a higher benchmark Selic rate.
    Brazil's Bovespa stock index edged higher, adding to
Wednesday's 2 percent gain, led by shares of lenders and
commodities exporters.
    Key Latin American stock indexes and currencies at 1308 GMT:

 Stock indexes                           daily %     YTD %
                             Latest       change    change
 MSCI Emerging Markets          977,03     -0,08      2,25
 MSCI LatAm                    2533,92     -0,82     -6,33
 Brazil Bovespa               54210,21      0,62      8,40
 Mexico IPC                          -         -         -
 Chile IPSA                    3960,52      0,11      2,85
 Chile IGPA                   19290,21       0,1      2,22
 Argentina MerVal                    0         0   -100,00
 Colombia IGBC                10313,02         0    -11,36
 Peru IGRA                 -            -            -
 Venezuela IBC                       0         0   -100,00
 Currencies                              daily %     YTD %
                                          change    change
 Brazil real                    3,1503     -1,15    -15,64
 Mexico peso                    15,487     -0,33     -4,80
 Chile peso                        632     -0,20     -4,05
 Colombia peso                    2530     -0,16     -5,61
 Peru sol                       3,1541      0,00     -5,55
 Argentina peso                 9,0275     -0,03     -5,29
 Argentina peso                  12,57      0,40     11,38
 (Reporting by Asher Levine; Editing by Paul Simao)