Brazil’s central bank signaled it will continue to cautiously cut interest rates to bolster a sluggish economy, as Europe’s debt crisis worsens and inflationary risks remain low. Interest rate futures fell.
Brazil’s economy grew at its fastest pace in 19 months in November, reversing a three-month contraction, as a recovery in consumer spending helped the world’s second-largest emerging market shrug off a global slowdown. Yields on interest rate futures rose.
Brazil’s swap rates climbed as Finance Minister Guido Mantega said the government will do whatever it takes to fight inflation and signaled an interest rate increase is an option, boosting bets policy makers will raise borrowing costs to control price gains.