Nov. 3 (Bloomberg) -- The Federal Reserve's provision of $30 billion each to four central banks last week may help Treasuries by reducing the banks' need to sell assets in support of their currencies, said Matthew Moore, an interest-rate strategist in New York at Banc of America Securities LLC.

The Fed on Oct. 29 agreed to provide so-called currency swaps to the central banks of Brazil, Mexico, South Korea and Singapore, expanding to emerging nations its effort to thaw frozen money markets. If tapped, the swaps make it less likely they'll have to sell reserve assets, which tend to consist largely of Treasuries and agency securities, to prop up their currencies, Moore wrote in a note dated Oct. 30.

Brazil's central bank has been buying reais to help shore up the real, which has fallen 29 percent from a nine-year high on Aug. 1. Brazil's ability to tap the Fed's swap line ``removes some sell-off risk for Treasuries and Treasury futures,'' Moore wrote.

Brazil held $146.2 billion in Treasuries as of August, according to the Treasury Department. That makes it the fifth- largest holder behind Japan, China, the U.K., and oil-exporting nations and Caribbean banking centers, according to the government.

The Fed's swaps are less likely to affect U.S. agency securities because Brazil, Mexico, South Korea and Singapore ``are not major players'' in the market, Moore said.

Treasury two-year notes fell last week, pushing their yields up 5 basis points, or 0.05 percentage point, to 1.56 percent, according to Bloomberg data. The yields fell 7 basis points to 1.49 percent as of 10:01 a.m. today in New York. Yields on 10-year notes rose 28 basis points last week to 3.96 percent, and fell 5 basis points today to 3.91 percent.

To contact the reporter on this story: Sandra Hernandez in New York at shernandez4@bloomberg.net

Last Updated: November 3, 2008 10:07 EST