EMERGING MARKETS-Brazil currency firms on limited cenbank intervention
By Bruno Federowski and Paula Arend Laier SAO PAULO, March 22 (Reuters) - The Brazilian real strengthened on Tuesday as traders bet the central bank will stick to a strategy of limited action to slow the currency's recent rally. For a second straight day, the central bank sold only some of the reverse currency swaps - equivalent to buying U.S. dollars in the futures market - it had offered. The bank had not conducted reverse currency swap sales in three years before Monday, leading some to speculate that the intervention was meant to keep the real weaker than a certain level in order to boost exports. But the bank only sold 15,500 contracts out of the 34,500 offered in the last two sessions, suggesting it could allow the currency to keep strengthening as long as it does so slowly. Brazil's stocks and currency have rallied over the last month as traders bet that growing chances of political change could boost investor confidence in the ailing Brazilian economy. The country's benchmark stock index fell on Tuesday, hit by weakness in financial shares. Stocks of Petroleo Brasileiro SA seesawed after the state-controlled oil company reported a record quarterly loss. Petrobras, as the company is known, booked a large writedown of oil-related assets due to slumping oil prices. However, some analysts struck a more upbeat tone, citing solid operating profit and cash flow. Morgan Stanley analysts upgraded their recommendation for the company's New York-listed shares to "equal-weight" from "underweight," saying higher appetite for Brazilian assets and better sentiment in oil markets should support the stock. Key Latin American stock indexes and currencies at 1745 GMT: Stock indexes Latest Daily YTD pct pct change change MSCI Emerging Markets 830.44 0.17 4.4 MSCI LatAm 2,157.86 0.26 17.63 Brazil Bovespa 51,008.08 -0.32 17.67 Mexico IPC 45,443.23 -0.09 5.74 Chile IPSA 3,951.21 -0.44 7.36 Chile IGPA 19,343.51 -0.39 6.57 Argentina MerVal 12,879.57 -0.45 10.32 Colombia IGBC 9,679.40 -0.21 13.24 Venezuela IBC 14,951.28 0 2.49 (Reporting by Bruno Federowski and Paula Arend Laier; Editing by Andrea Ricci)
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