Brazil’s shorter-term swap rates climbed to a one-month high as economists increased their inflation forecast for 2014, adding to speculation that the central bank will extend borrowing cost increases.
Swap rates rose seven basis points, or 0.07 percentage point, to 10.68 percent at 10:17 a.m. in Sao Paulo, the highest level on a closing basis since Dec. 5. The real appreciated 0.2 percent to 2.3531 per U.S. dollar.
Economists increased their inflation forecast for 2014 to to 6 percent from 5.97 percent a week earlier, according to the median of about 100 estimates in a central bank survey published today. To support the real and limit import price increases, Brazil will hold auctions starting Jan. 16 to roll over $11 billion in currency swaps maturing next month.
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