Sept. 21 (Bloomberg) -- Brazil’s real fell the most in a week after the government lowered its target for the budget surplus, fueling concern the country’s fiscal accounts are weakening amid the global recession. Interest-rate futures rose to the highest in two months.

The real declined 0.9 percent to 1.8247 per U.S. dollar from 1.8082 on Sept. 18, the biggest drop since Sept. 11. The yield on the overnight interest-rates futures contract due in January 2010, the most traded, rose two basis points, or 0.02 percentage point, to 8.68 percent, the highest since July 15.

The government lowered its primary surplus target for 2009, excluding results by state-controlled companies, to 14.2 billion reais ($7.81 billion) from 27.1 billion reais, according to Budget Ministry figures released Sept. 18. The ministry reduced Brazil’s expected 2009 revenue to 555 billion reais from 561 billion reais as slower economic growth reduces tax collection.

“It’s news like the primary surplus that focuses attention on weaknesses, and one of Brazil’s weaknesses is fiscal,” said Flavia Cattan-Naslausky, a currency strategist with RBS Securities Inc. in Stamford, Connecticut.

A slump in commodities is also hurting the Brazilian currency, said Leonardo Kestelman, the Brazilian representative of U.S. investor Dinosaur Securities LLC. The UBS Bloomberg Constant Maturity Commodity Index of 26 raw materials dropped 1.2 percent.

Commodities accounted for 42.8 percent of exports in the first eight months of this year, compared with 37.1 percent in 2008, according to data compiled by Brazil Trade and Development Ministry.

The government’s reduction of its primary surplus “put across the idea to the market that it wasn’t going to be very strict” in adhering to its fiscal targets, said Paulo Petrassi, manager or fixed income at Leme Investimentos in Florianopolis, Brazil.

“Certainly that could lead to faster inflation,” Petrassi said in a phone interview. “News so far has been positive on the side of level of activity and job creation, which is favorable for an increase in interest rates.”

The yield on Brazil’s zero-coupon bonds due January 2011 rose 19 basis points, or 0.19 percentage point, to 10.22 percent.

To contact the reporter on this story: Drew Benson in Buenos Aires at abenson9@bloomberg.net; Paulo Winterstein in Sao Paulo at pwinterstein@bloomberg.net.

Last Updated: September 21, 2009 17:26 EDT