EMERGING MARKETS-Brazil's real extends slide as cenbank fails to calm market

jueves 24 de septiembre de 2015 12:05 GYT
 

SAO PAULO, Sept 24 (Reuters) - Brazil's real extended its
week-long rout on Thursday as investors questioned how and when
the central bank would work to calm fears of a mounting economic
and political crisis.
    Other currencies in the region were steady, while the MSCI
Latin American stock index declined for the
sixth straight session.
    The real  has been in a tailspin this year,
weakening nearly 37 percent against the dollar as economic
recession, lower commodities prices, expectations for higher
interest rates in the United States and political turbulence at
home rattle investors.
    Traders focused on the central bank on Thursday as its
president, Alexandre Tombini, addressed the real's weakness
during a press conference in Brasilia.
    Tombini said the currency's depreciation had pressured
short-term inflation, sparking an initial jump in yields on
Brazilian interest rate futures <0#DIJ:> and a near-reversal in
the currency's initial loss of roughly 2.4 percent against the
dollar.
    Both asset classes retreated shortly thereafter, however, as
Tombini reiterated that the central bank intends to keep
interest rates at current levels for a prolonged time. 
    "The central bank's actions are very confusing, the result
being that the market doesn't know what to do and is operating
with this incredible volatility," said a trader who requested
anonymity because he is not authorized to speak with the press.
    The central bank intervened in the currency market twice on
Wednesday, though it did little to support the real. Tombini
said on Thursday that the bank could use any of its intervention
tools to limit volatility, including dollar sales from its
reserves, something the bank has not done since 2009.
    Brazil five-year credit default swaps (CDS) rose 33 basis
points from the previous close to 513 bps, according to data
from Markit. 
    Ongoing concerns about global economic growth continued to
weigh on other currencies in the region such as the Colombian
and Mexican pesos , though Chile's peso 
remained in positive territory, helped by a slight increase in
the price of copper, the country's main export.
    Elsewhere in emerging markets, both the South African rand
 and Turkish lira dropped to new record lows
against the dollar, while the Hungarian forint sank 1
percent to the euro after a cut in overnight deposit
rate to near zero.

    Key Latin American stock indexes and currencies at 1540 GMT:
    
 Stock indexes                        daily %    YTD %
                             Latest    change   change
 MSCI Emerging Markets        784.07    -0.98    -17.2
                                               
 MSCI LatAm                  1832.46    -2.04   -31.42
                                               
 Brazil Bovespa           44953.9734    -0.85   -10.11
                                   3           
 Mexico IPC                 42585.99    -1.06    -1.30
                                               
 Chile IPSA                   3685.4    -0.99    -4.30
                                               
 Chile IGPA                 18080.77    -0.83    -4.18
                                               
 Argentina MerVal           8817.079    -7.39     2.77
                                               
 Colombia IGBC               9188.99    -0.64   -21.02
                                               
 Venezuela IBC              12263.77    -0.02   217.82
                                               
                                                      
 Currencies                           daily %    YTD %
                                       change   change
                              Latest           
 Brazil real                  4.1942    -1.16   -36.64
                                               
 Mexico peso                 17.1625    -0.22   -14.09
                                               
 Chile peso                    702.4     0.16   -13.67
                                               
 Colombia peso                3142.3    -0.80   -24.00
 Peru sol                     3.2261    -0.09    -7.66
                                               
 Argentina peso               9.4000    -0.03    -9.04
 (interbank)                                   
                                               
 Argentina peso                 15.9     0.19   -11.95
 (parallel)                                    
                                               
 
 (Reporting by Asher Levine and Bruno Federowski; Editing by
Andrew Hay)