Brazil’s Real Drops From One-Month High on Economic Team Concern

Paula Sambo – Bloomberg News, 1/15/2015

Brazil’s real fell from a one-month high on concern over Finance Minister Joaquim Levy’s ability to restore growth to Latin America’s largest economy.

The currency dropped 0.5 percent to 2.6306 per U.S. dollar at 2:57 p.m. in Sao Paulo after climbing yesterday to its strongest level since Dec. 9. Swap rates, a gauge of expectations for changes in borrowing costs, declined 0.04 percentage point to 12.62 percent on the contract maturing in January 2016.

Concern that Brazil’s fiscal deterioration would lead to a reduced credit rating helped push the real down 11 percent in 2014. Levy told reporters in Brasilia on Jan. 13 that seeking to cut gross debt below 50 percent of gross domestic product in the long term would be a positive step.

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