Brazil's interest-rate futures jump after central bank minutes

Thu Jul 24, 2014 8:34am EDT

RIO DE JANEIRO, July 24 (Reuters) - Yields paid on Brazil's
interest-rate futures contracts jumped higher on Thursday after
minutes of the central bank's latest monetary policy meeting
poured cold water on speculation that policymakers could cut the
benchmark Selic interest rate any time soon.
    Interest rates for January 2015 rose 3 basis points
to 10.74 percent after the central bank said in a statement it
"anticipates an outlook of resistant inflation in coming
quarters." 
    The bank added that keeping monetary conditions stable
"tends to get (inflation) in the path of convergence toward its
goal.
    Speculation that Brazil could cut interest rates in the next
few months grew after the central bank last week said it had
kept the Selic at 11 percent "at this moment" - an expression it
usually uses to signal that a change in policy is possible in
the short term. 
    Many economists thought the bank was considering lowering
the Selic to boost an economy that has been flirting with
recession, even though inflation remains at the ceiling of a
government target.
    
    Most traded interest-rate contracts at 1220 GMT:
 month   ticker       last       previous     change(p.p.
                      (pct)     close(pct)         )
  JAN5                10.77       10.74          0.03
  JAN6                11.02       10.95          0.07
  JAN7                11.2        11.14          0.06
  JAN1                11.44       11.46          -0.02
     

 (Reporting by Walter Brandimarte Editing by W Simon)
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