Jan. 30 (Bloomberg) -- Brazil's currency may weaken as the country's inflation rises less than expected, giving the central bank room to step up benchmark interest rate cuts.

Brazil's currency was unchanged at 2.2100 reais to the dollar at 6:13 a.m. New York time. The real has rallied 20 percent in the past 12 months, the best performer among 60 currencies tracked by Bloomberg News.

The country's broadest inflation index rose 0.92 percent in the 30 days through Jan. 20, less than the 1 percent median estimate in a Bloomberg survey of 17 economists. The IGP-M, an index of consumer, wholesale and construction prices measured by the Rio de Janeiro-based Getulio Vargas Foundation, fell 0.01 percent in the previous period through Dec. 20.

The dollar futures contract for February 2006, the most widely traded on the BM&F commodity and futures exchange in Sao Paulo, fell 0.2 percent to 2.2150 reais per dollar from 2.2116 reais on Jan. 27. The contract shows investors' expectations for the exchange rate at the end of January.

The yield to the 2015 call date on Brazil's benchmark 11 percent bond due in 2040 rose to 6.75 percent and the yield to maturity rose to 8.37 percent from 8.33 percent on Jan. 27, according to JPMorgan Chase & Co. The bond's price, which moves inversely to the yield, fell 0.60 cent on the dollar to 129.50. The bond's price closed at a record high of 131.35 on Jan. 9.

To contact the reporter on this story: Elzio Barreto in Sao Paulo at ebarreto@bloomberg.net

Last Updated: January 30, 2006 06:21 EST