EMERGING MARKETS-Brazil real leads Latam FX up on cenbank measure

Tue Dec 4, 2012 11:57am EST

* Brazil central bank eases export financing rules
    * Hopes of US budget deal supports risk appetite
    * Brazil real up 0.4 pct, Mexico peso gains 0.2 pct

    By Natalia Cacioli
    SAO PAULO, Dec 4 (Reuters) - Brazil's real lead gains among
Latin American currencies after the central bank acted to ease
financing for exporters, a move that will likely boost dollar
inflows to the country.
    The currencies of Mexico and Chile were also stronger on
hopes that a meeting of U.S. congressional leaders and governors
with President Barack Obama would advance budget negotiations
that are essential to ensure the world's largest economy will
keep growing next year. 
    The Brazilian real  erased early losses and
gained 0.4 percent after the central bank narrowed the scope of
a hefty tax levied on exporters that receive advance payment for
the goods they sell abroad, likely boosting liquidity in the
foreign exchange market. 
    Under the new rules Brazil will eliminate a 6 percent
financial transaction tax (IOF) on prepayments of up to five
years on exports. 
    The decision came one day after the central bank heavily
intervened in the market -- auctioning currency swaps and
dollars on the spot market -- to halt a sharp depreciation of
the real. 
    "The market was going too fast in the direction of a weaker
currency. Today's measure comes on the heels of yesterday's
strong intervention, so it is meaningful," said Alfredo
Barbutti, chief economist at BGC Liquidez, a brokerage in Sao
Paulo.
    The series of interventions are likely an attempt by the
central bank to smooth out a recent slump in the real, which
lost 4.7 percent in November, still allowing the currency to
gradually weaken. 
    Members of the Brazilian government have said they want a
weaker currency to help manufacturers lift exports and better
compete against imports, but it is not clear how much the
central bank will allow the real to slide, given inflation
concerns.
    In Mexico, the peso rose 0.2 percent to 12.9698 per
dollar., with traders saying the currency is likely to trade
between 12.9 and 13.0 this session.   

    Latin American FX prices at 16:35 GMT
    
 Currencies                         daily %    YTD %
                                     change   change
                            Latest           
 Brazil real                2.1108     0.39   -11.48
                                             
 Mexico peso               12.9650     0.24     7.75
                                             
 Argentina peso*            6.4300     0.16   -26.44
                                             
 Chile peso               480.7000     0.15     8.03
                                             
 Colombia peso          1,813.7500     0.09     6.87
                                             
 Peru sol                   2.5780     0.08     4.62
                                             
 * Argentine peso's rate between                    
 brokerages
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