Brazil Swap Rates Rise After Tombini Comments; Real Advances

Brazil swap rates rose, erasing earlier declines, as traders interpreted comments from central bank President Alexandre Tombini as leaving the door open for interest-rate increases.

“When necessary, if supported by the prospective scenario for inflation, the posture of the central bank in relation to monetary policy will be adequately adjusted,” Tombini said at an event in Brasilia.

Swap rates due January 2015 rose three basis points, or 0.03 percentage point, to 8.48 percent at 5:15 p.m. in Sao Paulo, after earlier falling as much as 14 basis points. The real gained 0.4 percent to 1.9548 per dollar.

Tombini’s comments are a sign that “the central bank may not raise rates in March, but nothing is guaranteed in the meeting after that in April,” Paulo Petrassi, managing partner at Leme Investimentos, said in a phone interview from Sao Paulo.

To contact the reporters on this story: Blake Schmidt in Sao Paulo at bschmidt16@bloomberg.net; Marisa Castellani in Sao Paulo at mcastellani7@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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