Brazil’s swap rates climbed as a weakening real threatened to stoke inflation by making imports more expensive, adding to speculation that the central bank will further raise borrowing costs.
Swap rates on contracts maturing in January 2015 rose for a second straight day, increasing four basis points, or 0.04 percentage point, to 11.37 percent at 10:44 a.m. in Sao Paulo. The real dropped 0.5 percent to 2.4117 per dollar.
“In the swap rates market today, attention is focused on currency flows,” Octavio de Barros, the chief economist at Banco Bradesco SA, said in an e-mailed note to clients.
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