Brazilian consumer prices rose at the fastest pace in nine months in January on higher transport, food and drink costs, reinforcing bets the central bank will miss its year-end inflation target as the economy rebounds.
Brazilian swap rates declined to a seven-month low as evidence of a weakening economy added to speculation that policy makers will limit further increases in borrowing costs.
Brazilian interest-rate forecasts by economists and traders are diverging by the most this year. Recent history shows traders are more accurate predictors of the country’s monetary policy.
Brazilian swap rates fell for the first time in three days as a report indicated that annual inflation accelerated less than forecast in April.
Brazil’s swap rates climbed after the central bank signaled in minutes of its last meeting that it would keep raising borrowing costs to curb inflation.
"The measure announced today could inject a good amount of money into the economy."
- Solange Srour on Aug 20, 2014