EMERGING MARKETS-Brazil real gains as cenbank extends swap rollover

Reuters

RIO DE JANEIRO, Oct 25 (Reuters) - The Brazilian real rose

more than half a percentage point early on Friday after the

central bank announced it will continue to roll over currency

swaps that expire early next month, providing additional support

to the exchange rate.

The Mexican peso was little changed, however, as investors

awaited a key monetary policy decision at 1400 GMT.

During the past few days, Latin American currencies in

general have been supported by bets that the U.S. Federal

Reserve will delay the unwinding of its bond-buying program,

which for years has supported investors' appetite for emerging

market assets.

* Brazil's real rose 0.9 percent to 2.1820 per

dollar after the central bank last announced last night that it

will continue to roll over currency swaps maturing on Nov. 1

with three auctions next Monday, Tuesday and Wednesday. Such

swaps are derivatives that provide investors with protection

against a depreciation of the real.

* The announcement surprised many investors who thought

Brazilian policymakers had already concluded the roll-over of

the $8.9 billion worth of currency swaps that expire early next

month. Bets on a partial roll-over increased as the real

recently traded at four-month highs.

* Brazil's central bank has so far rolled over nearly $3

billion of the swaps maturing in November. It has still not

announced how many swaps it will offer during next week's

auctions.

* The Mexican peso was little changed at 12.98 per

dollar as investors have mostly priced in a 25-basis-point

interest rate cut that should take Mexico's benchmark rate to

3.5 percent.

* The Chilean peso lost 0.4 percent, however,

tracking a half percentage point decline in the price of copper

, the country's main export product.

Latin America FX prices at 1245 GMT:

Currencies daily % YTD %

change change

Latest

Brazil real 2.1820 0.85 -6.51

Mexico peso 12.9635 0.09 -0.77

Chile peso 505.1000 -0.32 -5.23

Peru sol 2.7610 0.14 -7.61

Argentina peso 5.8675 -0.04 -16.28

Argentina peso 10.0600 0.20 -32.60

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