Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Brazil Swap Rates Fall as Rousseff Pledges to Bolster Growth

July 13 (Bloomberg) -- Brazilian swap rates fell, erasing earlier gains, after President Dilma Rousseff said the government will continue to remove obstacles to economic growth.

Swap rates on contracts due in January 2014 fell two basis points, or 0.02 percentage point, to 7.67 percent at 5:14 p.m. in Sao Paulo, extending their weekly drop to 15 basis points. The rates touched a record low 7.61 percent yesterday. The real was little changed at 2.0376 per dollar and has declined 0.4 percent this week.

Brazil’s government will try to offer concessions to private companies and is working to remove obstacles to growth, including by lowering taxes, President Dilma Rousseff said at an event in Bahia state today.

“In the afternoon swap rates fell again with Dilma affirming that she wants to remove obstacles to growth, a sign lower rates are here to stay,” said Luciano Rostagno, the chief strategist at Banco WestLB do Brasil SA, in a phone interview from Sao Paulo. “Investors are also betting that next week’s central bank minutes will be dovish and that the current pace of cuts of 50 basis points will continue.”

Brazil’s swap rates were headed for a seventh straight weekly decrease on speculation policy makers will sustain the pace of reductions in borrowing costs at their August meeting as the economy slows.

Central bank board members voted unanimously on July 11 to lower the target lending rate by a half-percentage point to a record low 8 percent, an eighth-straight reduction, saying economic “fragility” abroad is leading to slower inflation. The central bank has lowered the benchmark by 4.5 percentage points since August, the most among the Group of 20 nations.

Central bankers led by President Alexandre Tombini have lowered rates 4.5 percentage points since August.

To contact the reporter on this story: Gabrielle Coppola in Sao Paulo at gcoppola@bloomberg.net

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

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.