Skip to content
Subscriber Only

No Goodbye Rate Increase Spurs Traders’ Flip-Flop: Brazil Credit

Brazilian traders are scrapping bets that central bank President Henrique Meirelles will raise interest rates this week in the final meeting of his eight-year tenure, futures contracts show.

Meirelles’s decision Dec. 3 to increase bank reserve requirements squelched speculation he’d raise the benchmark rate from 10.75 percent to bring inflation down from a 20-month high of 5.5 percent. Rate-futures yields due in January sank 15 basis points on Dec. 3 to 10.69 percent, showing traders expect no change in rates at the Dec. 8 policy meeting. On Dec. 2, they were betting on an increase of at least 25 basis points.