Brazil’s swap rates fell as economists forecast a stronger real than they had projected, boosting speculation that the central bank won’t need to raise borrowing costs as appreciation reduces inflation concern.
Swap rates due in July 2013 dropped two basis points, or 0.02 percentage point, to 7.06 percent at 10:36 a.m. in Sao Paulo. The real was little changed at 1.9894 per dollar.
The real will end the year at 2.05 per dollar, according to the median forecast of about 100 economists in a central bank survey published today, stronger than the 2.07 they estimated a week earlier. The real rallied to a level stronger than 2 per U.S. dollar Jan. 28 for the first time since July as the central bank intervened to boost the currency by selling $1.85 billion of foreign-exchange swaps as inflation accelerated.
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