Brazil’s Real Slides as Economists Lower Inflation Estimate

By Drew Benson
Jan. 5 (Bloomberg) -- Brazil’s real slid for a second day as economists lowered their 12-month inflation outlook, leading to bets that the central bank will cut interest rates.
The real declined 0.2 percent to 2.3227 per dollar at 7:32 a.m. New York time. The currency is down 0.4 percent this year.
Prices will likely rise 4.96 percent in 12 months, according to the central bank’s weekly survey of about 100 economists. That’s down from a 5.01 percent estimate a week ago.
The Rio de Janeiro-based Getulio Vargas Foundation reported the rate of inflation fell to 0.52 percent during the month ending Dec. 31, down from the 0.61 percent increase posted a week earlier.
The yield on Brazil’s overnight futures contract for January 2010 declined seven basis points, or 0.07 percentage point, to 12.09 percent.
The yield on Brazil’s zero-coupon local-currency bonds due January 2010 fell five basis points to 12.15 percent.