Brazil Swap Rates Drop on Lower GDP Outlook; Real Appreciates
Brazil’s swap rates fell to a three- week low after economists cut their 2013 growth forecast, bolstering bets that the central bank will refrain from increasing borrowing costs at its policy meeting this week.
Swap rates on the contract due in January 2015 dropped four basis points, or 0.04 percentage point to 7.69 percent at 9:58 a.m. in Sao Paulo, the lowest on a closing basis since Dec. 19. The real appreciated 0.1 percent to 2.0322 per dollar.
Brazil’s gross domestic product will expand 3.20 percent this year, according to the median forecast in a central bank survey of about 100 analysts published today. They projected in the prior week 3.26 percent economic growth. Policy makers have left the benchmark rate unchanged at a record low 7.25 percent since October.
“There should be no debate,” Newton Rosa, the chief economist at SulAmerica Investimentos in Sao Paulo, said by phone. “They will leave the rate unchanged.”
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