Brazilian swap rates declined as slower-than-forecast inflation added to speculation that the central bank will limit further increases in borrowing costs.
Swap rates on contracts maturing in January 2017 fell four basis points, or 0.04 percentage point, to 12.36 percent at 10:24 a.m. in Sao Paulo and are up one basis point this week. The real dropped 0.1 percent to 2.3567 per U.S. dollar, paring its rally since Dec. 20 to 1.3 percent.
Wholesale, construction and consumer prices rose 0.60 percent in the month through Dec. 20, the Getulio Vargas Foundation reported today. The median forecast of economists surveyed by Bloomberg was a 0.62 percent increase. Brazil has lifted the target lending rate by 2.75 percentage points since April, the biggest increase among 49 central banks.
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