Brazil’s swap rates climbed on speculation among some traders that policy makers convening for a two-day meeting will lift borrowing costs by a half-percentage point for a sixth straight time to curb inflation.
Swap rates on contracts maturing in January 2017 were up for a second consecutive day, rising seven basis points, or 0.07 percentage point, to 12.32 percent at 11:03 a.m. in Sao Paulo. The real depreciated 0.2 percent to 2.3629 per U.S. dollar after rising yesterday to the strongest level this month.
“The market seems to be migrating toward a bet on a rate hike of 50 basis points,” Daniel Weeks, the chief economist at Garde Asset Management in Sao Paulo, said in a phone interview.
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