Brazilian Swap Rates Decline as Economy Contracts; Real Advances

Brazil’s swap rates dropped after a report showed the nation’s economy contracted more than forecast in December, adding to speculation that the central bank will limit further increases in borrowing costs.

Swap rates on contracts maturing in January 2015 declined six basis points, or 0.06 percentage point, to 11.32 percent at the close in Sao Paulo and were down the same amount this week. The real appreciated 0.2 percent to 2.3889 per U.S. dollar and has lost 0.4 percent since Feb. 7.