EMERGING MARKETS-Mexico peso rallies as cenbank signals no more rate cuts
RIO DE JANEIRO, Oct 25 (Reuters) - Mexico's peso rallied on Friday after the country's central bank lowered its benchmark interest rate as expected and said no more cuts were recommended, boosting investor appetite for the currency. Meanwhile, in Brazil, the real rose more than half a percentage point after policymakers announced they will continue to roll over currency swaps that expire early next month, providing additional support to the exchange rate. Over the past few days, Latin American currencies in general have been supported by bets that the U.S. Federal Reserve will delay the unwinding of its bond-buying program, which has supported investors' appetite for higher-risk emerging market assets. * The Mexican peso jumped 0.74 percent to 12.8800 per dollar after the central bank said no more interest rate cuts would be "advisable in the foreseeable future," as the economy appears to have already suffered the worst of a recent slowdown. * The statement by the Mexican central bank came with a widely-expected decision to cut its benchmark interest rate by 25 basis points to 3.5 percent. The Mexican peso had weakened in the past few days as investors priced in interest rate cuts that could reduce the currency's allure. * Brazil's real firmed 0.58 percent to 2.1879 per dollar after the central bank announced last night that it will continue to roll over currency swaps maturing on Nov. 1 with three auctions next Monday, Tuesday and Wednesday. Such swaps provide investors with protection against a depreciation of the real. * The announcement surprised many investors who thought Brazilian policymakers would not announce additional auctions to renew all of the $8.9 billion worth of currency swaps that expire early next month. Bets on a partial roll-over increased as the real recently traded at four-month highs. * Brazil's central bank has so far rolled over nearly $3 billion of the swaps maturing in November. It has still not announced how many swaps it will offer during next week's auctions. * Brazil has been regularly selling currency swaps and dollar repos as part of a daily intervention program designed to stabilize the currency market. The central bank said on Friday it has sold $4 billion through repurchase agreements in the month through Oct. 23. * The Chilean peso lost 0.4 percent. Latin America FX prices at 2036 GMT: Currencies Daily pct YTD pct change change Latest Brazil real 2.1879 0.58 -6.76 Mexico peso 12.8800 0.74 -0.12 Chile peso 505.5000 -0.40 -5.30 Colombia peso 1,882.5500 -0.07 -6.19 Peru sol 2.7590 0.07 -7.54 Argentina peso (interbank) 5.8825 -0.21 -16.49 Argentina peso (parallel) 10.0600 0.20 -32.60
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