SAO PAULO, April 10 Brazil's currency and stocks
declined on Monday, reflecting lingering uncertainty over the
passage of a proposed pension reform and the impact of sliding
iron ore prices in China.
Brazil's real weakened as much as 0.2 percent to
3.14150 reais in midday Monday trading. The benchmark Bovespa
stock index fell for the third day in four sessions.
Investors are gauging the difficulty of passing a pension
reform to cut social security expenses by 700 billion reais
($223 billion) over the next decade. In recent days, informal
polls by local media have indicated a lack of congressional
support for the plan, which senior government officials are
trying to downplay.
Expectations that the central bank will cut its benchmark
Selic overnight lending rate by a full percentage point on
Wednesday have been offset by a wait-and-see approach to the
reform agenda, the cornerstone of President Michel Temer's plan
to pull Brazil from its worst economic recession on record.
"There was no progress in the pension reform process since
the last interest-rate meeting" almost 45 days ago, said a
research report by Itaú BBA, noting that "resistance in Congress
seems to be growing."
Preferred shares of Itaú Unibanco Holding SA, the
stock with the largest weighting in the Bovespa, fell 0.6
percent. The bank won a 25 billion-real ($8 billion) tax case
with the government on Monday, although it can be appealed by
tax agency officials.
Preferred shares of Vale SA, the world's No. 1
iron ore producer, shed 1.3 percent to 27.20 reais, near a
two-week low, as prices for the mineral fell in China.
Key Latin American stock indexes and currencies at 1655 GMT:
Stock indexes daily % YTD %
Latest change change
MSCI Emerging Markets 957.68 -0.41 11.52
MSCI LatAm 2637.26 -0.42 13.14
Brazil Bovespa 64404.66404 -0.29 6.94
Mexico IPC 49207.34 -0.28 7.81
Chile IPSA 4886.97 -0.03 17.72
Chile IGPA 24484.02 0.04 18.09
Argentina MerVal 20860.67 0.64 23.31
Colombia IGBC 10202.83 0.26 0.74
Venezuela IBC 45387.6 -1.36 1076.23
Currencies daily % YTD %
Brazil real 3.1428 0.19 -15.44
Mexico peso 18.6625 -0.13 -21.00
Chile peso 652.8 0.41 -7.11
Colombia peso 2869.65 -0.40 -16.78
Peru sol 3.245 0.00 -8.20
Argentina peso (interbank) 15.3000 0.33 -44.12
Argentina peso (parallel) 15.58 0.71 -10.14
($1 = 3.14 reais)
(Reporting by Guillermo Parra-Bernal and Claudia Violante;
Editing by Dan Grebler)