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EMERGING MARKETS-Brazil, Colombia currencies rally as cenbankers act
November 3, 2015 / 5:46 PM / 2 years ago

EMERGING MARKETS-Brazil, Colombia currencies rally as cenbankers act

By Walter Brandimarte
    SAO PAULO, Nov 3 (Reuters) - The currencies of Brazil and
Colombia rallied on Tuesday after central bankers of both
countries intervened in the foreign exchange market, although
low trading volumes magnified gains in the Brazilian real.
    The real climbed 2.7 percent to 3.76 per dollar after
the central bank announced it would sell on Tuesday as much as
$500 million on the spot market through repurchase agreements.
    Traders said they expect the Brazilian central bank to step
up dollar offerings through so-called repo operations to provide
liquidity to the market, as it often does at the end of each
year.
    It was the first time the real traded stronger than 3.8 per
dollar in more than 15 days, but traders said thin trading
volumes intensified gains. They also warned the real could soon
see losses as political and economic uncertainties linger.
    The Colombian peso rose 3.6 percent to 2,793 per
dollar - its strongest level in more than three months - after
the central bank raised benchmark interest rates by a
higher-than-expected 50 basis points and announced an
intervention mechanism to moderate "unjustified" exchange rate
variations. 
    "The decision ... to intervene in the foreign exchange
market to smooth excessive volatility in the exchange rate shows
that policymakers are concerned that the currency will come
under pressure again," Adam Collins, an assistant economist at
Capital Economics, wrote in a note to clients.

    Latin American stock indexes and currencies at 1730 GMT:    
 Stock indexes                       Latest      Daily  YTD pct
                                                   pct   change
                                                change  
 MSCI Emerging Markets                 860.85     1.25   -11.09
 MSCI LatAm                          2,082.07     3.77   -26.44
 Brazil Bovespa                     47,592.85     3.76    -4.83
 Mexico IPC                         45,129.78     1.32     4.60
 Chile IPSA                          3,867.28     0.74     0.42
 Chile IGPA                         18,975.52     0.64     0.56
 Argentina MerVal                   12,566.93     0.44    46.48
 Colombia IGBC                       9,139.48    -0.16   -21.45
 Venezuela IBC                      11,400.85     1.67   195.46
                                                               
 Currencies                            Latest    Daily  YTD pct
                                                   pct   change
                                                change  
 Brazil real                           3.7613     2.67   -29.35
 Mexico peso                          16.3802     0.35    -9.99
 Chile peso                            688.25     0.51   -11.89
 Colombia peso                          2,793     3.69   -14.50
 Peru sol                              3.2821     0.15    -9.23
 Argentina peso (interbank)            9.5550     0.00   -10.52
                                                        
 Argentina peso (parallel)              15.48     0.97    -9.56
 
 (Reporting by Walter Brandimarte, editing by G Crosse)

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