Brazil’s Real Declines as Syria Concern Outweighs Intervention

Brazil’s real fell after U.S. Secretary of State John Kerry said Syria will be held accountable for using chemical weapons, outweighing the central bank’s $60 billion program to stem the real’s slide.

The real fell 1.3 percent to 2.4117 per dollar at 9:43 a.m. in Sao Paulo. Swap rates due January 2015 rose eight basis points, or 0.08 percentage point, to 10.42 percent.

Kerry said President Barack Obama believes there must be accountability for the “moral obscenity” of using chemical weapons, fanning concern unrest may disrupt Middle East oil supplies.

“The problems in Syria are a new spark in an already complicated scenario”, Jose Carlos Amado, trader at Brazilian brokerage Renascença DTVM, said by phone from Sao Paulo.

Brazilian central bankers start a two-day policy meeting today. Forty-four of 46 economists surveyed by Bloomberg predict they will raise the target lending rate to 9 percent from 8.5 percent.

The real rallied the most in almost two years on Aug. 23, the day after the central bank unveiled a $60 billion plan to shore up the real by auctioning $1 billion of dollar loans every Friday and offering $500 million of currency swaps Monday through Thursday for the rest of the year.

To contact the reporters on this story: Blake Schmidt in Sao Paulo at bschmidt16@bloomberg.net; Josue Leonel in Sao Paulo at jleonel@bloomberg.net

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

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