Yields on Brazil’s interest-rate
futures contracts headed for a third weekly decline as the
central bank said economic growth may have slowed, helping to
contain inflation and boosting speculation policy makers will
slow the pace of interest-rate increases.
The yield on the contract due in January, the most traded
in Sao Paulo, fell five basis points, or 0.05 percentage point,
to a three-month low of 10.77 percent at 8:52 a.m. New York
time. The yield has dropped 17 basis points this week. It last
fell for three straight weeks in the period ended July 17, 2009.
“The move began before the bank meeting, picked up after
the rate decision, and continued after the dovish statements
this week,” said Flavia Cattan-Naslausky, a strategist with RBS
Securities Inc. in Stamford, Connecticut. “Now the expansion of
growth has to consolidate to validate the central bank’s
position.”
A slowing Chinese economy, and doubts about the strength of
the U.S. recovery, is helping to fight inflation that’s been
above the government’s 4.5 percent target since January, the
bank said yesterday in the minutes of its July 20-21 meeting. A
drop in the inflation rate and evidence Latin America’s biggest
economy is slowing prompted the central bank to reduce the pace
of interest rate increases last week.
The real fell 0.3 percent to 1.7629 per dollar, from 1.7580
yesterday. The currency has climbed 0.7 percent this week.
To contact the reporters on this story:
Boris Korby in New York at
Bkorby1@bloomberg.net;
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