May 21, 2018 / 4:11 PM / 5 months ago

EMERGING MARKETS-Brazil's real reverses slide after central bank boosts swaps

    SAO PAULO, May 21 (Reuters) - The Brazilian real rose almost
1 percent against the dollar on Monday, reversing a sharp slide
in recent weeks, after the country's central bank boosted its
currency swap program and said more intervention could be on the
way.
    Brazil's central bank on Friday evening said it would triple
the currency swap contracts - equivalent to operations to sell
dollars in futures markets - offered daily to 15,000, after the
real fell to its lowest level in more than two years.

    On Monday, the bank sold the 15,000 swaps and another set of
4,225 swaps.
    By midday, the real had risen 0.83 percent to around
3.71 to the dollar, up from the Friday low of around 3.74 to the
greenback. Traders said the real might have risen more had it
not been for market caution ahead of the scheduled release on
Tuesday of the Brazilian central bank minutes.
    "The anticipation of the central bank minutes ... is making
the market a little cautious," said Paulo Petrassi, a partner at
Florianopolis, Brazil-based Leme Investimentos.
    Argentina's volatile peso currency also gained on
Monday, rising 0.95 percent against the dollar amid optimism
over ongoing efforts by the government to obtain a financing
line from the International Monetary Fund.
    Consultancy Delphos Investimentos wrote in a note that there
also appeared to be positive bias in the market regarding the
possibility that index-provider MSCI might include the country
in its emerging markets index, though the nation's Merval
equities index fell on Monday amid profit-taking.
    Last week, MSCI said Argentina's recent market turmoil would
make more difficult a decision on elevating it from its current
"frontier" market status. The decision is due next month.

    Around the region, Latin America's equities markets were
mixed, with Mexico's IPC index posting the only
significant move, rising 0.6 percent as traders hunted for
opportunities after the index hit its lowest point in 16 months
on Friday.  
    
Key Latin American stock indexes and currencies at 1520 GMT:
    
 Stock indexes                           daily %     YTD %
                             Latest       change    change
 MSCI Emerging Markets         1139.72      0.17     -1.79
                                                  
 MSCI LatAm                    2721.72      0.75     -4.48
                                                  
 Brazil Bovespa               82982.12     -0.12      8.61
                                                  
 Mexico IPC                   45938.75       0.6     -6.92
                                                  
 Chile IPSA                    5667.86     -0.38      1.86
                                                  
 Chile IGPA                   28679.66     -0.29      2.50
                                                  
 Argentina MerVal             31815.97     -0.17      5.82
                                                  
 Colombia IGBC                12159.87      0.27      6.94
                                                  
 Venezuela IBC                22661.01     -1.25   1694.02
                                                  
                                                          
 Currencies                              daily %     YTD %
                                          change    change
                                Latest            
 Brazil real                    3.7083      0.83    -10.65
                                                  
 Mexico peso                   19.8950      0.23     -0.99
                                                  
 Chile peso                      636.5      0.00     -3.43
                                                  
 Colombia peso                  2903.1      0.53      2.72
 Peru sol                        3.287      0.00     -1.52
                                                  
 Argentina peso                24.2000      0.95    -23.14
 (interbank)                                      
                                                  
 Argentina peso                   25.1      1.20    -23.39
 (parallel)                                       
                                                  
 

 (Reporting by Gram Slattery and Claudia Violante
Editing by Paul Simao)
  
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