EMERGING MARKETS-Brazil real slumps after cenbank keeps rates unchanged

jueves 21 de enero de 2016 11:48 GYT
 

By Bruno Federowski
    SAO PAULO, Jan 21 (Reuters) - The Brazilian real slumped as
much as 1.7 percent on Thursday after the central bank surprised
many investors and held its benchmark interest rate, sending the
currency to nearly all-time lows.
    Hours before the central bank rates decision late on
Wednesday, interest rates futures markets indicated a high
probability of a 25 basis-point increase. A Reuters poll also
showed most economists expected an interest rate rise aimed at
curbing inflation.
    Until early this week, most traders bet on a 50 basis-point
increase in the Selic rate to 14.75 percent. Many trimmed their
bets the bank chief Alexandre Tombini said on Tuesday he would
take in account downward revisions to the country's growth
outlook in the rate decision. 
    "The bank can make an argument that rate hikes would only
choke off the economy more without doing much to limit
inflation," analysts with Brown Brothers Harriman wrote in a
client note.
    "However, we think the bank should have hiked in order to
maintain a shred of credibility, and we had held out hope for at
least a token 25-basis-point hike. By not hiking at all, we
think the bank has sacrificed its credibility beyond repair."
    Yields paid on short- and medium-term futures contracts in
Brazil fell on Thursday, adjusting to the central bank's
decision, while longer-term yields rose as traders bet the
central bank could be forced to tighten policy even more in the
future.
    The Brazilian real fell as low as 4.1723 per U.S.
dollar, its weakest since its record low of 4.2482 on Sept. 24.
It later slightly pared losses to 4.1566 for a 1.3 percent loss
on the day.
    Other Latin American currencies inched up after European
Central Bank President Mario Draghi said the bank will review
its monetary policy in March, prompting bets on new stimulus.
Gains were limited as oil prices remained close to 13-year lows,
putting a cap on demand for commodity-linked currencies.
 
    The Chilean peso rose 0.2 percent, tracking a
slight rise in copper prices, while the Mexican peso 
strengthened 0.1 percent.
    
    Latin American stock indexes and currencies at 1440 GMT:
 Stock indexes                               daily %    YTD %
                                              change   change
                                   Latest             
 MSCI Emerging Markets               688.18    -0.66   -12.77
 MSCI LatAm                          1578.7    -0.13   -13.61
 Brazil Bovespa                    37806.97     0.43   -12.79
 Mexico IPC                         40722.9     -0.3    -5.25
 Chile IPSA                         3465.81     0.29    -5.83
 Chile IGPA                        17204.29     0.26    -5.22
 Argentina MerVal                      9486      0.9   -18.75
 Colombia IGBC                      8103.15     0.25    -5.20
 Venezuela IBC                     14490.87     0.12   275.53
                                                             
 Currencies                                  daily %    YTD %
                                              change   change
                                                      
                                     Latest           
 Brazil real                         4.1639    -1.47   -36.18
 Mexico peso                        18.4988     0.09   -20.30
 Chile peso                           727.3     0.23   -16.62
 Colombia peso                      3388.95     0.11   -29.54
 Peru sol                            3.4461    -0.03   -13.55
 Argentina peso (interbank)         13.5200    -0.15   -36.76
                                                      
 Argentina peso (parallel)            14.32     0.21    -2.23
                                                      
 
 (Editing by W Simon)