The Brazilian real, Brazil's currency, had its biggest weekly gain in almost two months on optimism the worst of the global recession is over. The real climbed 3.6% lastÂ week, the most since the period ended May 22, rising 0.3% to 1.9261 per US dollar on Friday. So far this year the real has strengthened 20%.
Retail sales in Brazil also rose more than analysts expected in May, reinforcing speculation that consumer demand is driving the rebound in Latin America's biggest economy. Sales rose 4 in May from the same month a year earlier, compared with a revised 7.1% gain in April, according to the national statistics agency IBGE
Meanwhile Brazil's international reserves rose to a record yesterday as the Central Bank steps up its purchases of dollars to curb the appreciation of the Brazilian currency.
International reserves climbed to US$ 209.576 billion on July 16, compared with the previous high of 209.386 billion set last year, on October 6. Reserves have climbed 5% from this year's low of 199.337 billion at the end of February.
The Brazilian Central Bank is expected to lower the benchmark interest rate 0.5 percentage points to 8.75% at the next meeting July 21-22, according to the median forecast in a July 10 central bank survey of about 100 economists published July 13.
They forecast the bank will then leave the benchmark rate unchanged this year before raising it to 9.25% by the end of 2010, the survey showed.
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