Brazil Pledges $30 Billion Spending Cut to Ease Rate Increases

Brazil’s government pledged yesterday to slash 50 billion reais ($30 billion) from this year’s spending plans in a bid to ease pressure on the central bank to raise interest rates.

The yield on the interest rate futures contract maturing January 2013, the most traded in Sao Paulo, is heading for its biggest weekly drop in almost four months as traders trim bets that inflation, now at a 26-month high, may surge.