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EMERGING MARKETS-Real jumps on China reform push, swap rollover bets

RIO DE JANEIRO, Nov 18 (Reuters) - The Brazilian real

rallied 2 percent on Monday, greatly outperforming its Latin

American peers, as markets welcomed China's ambitious reform

push and traders bet that Brazilian policymakers will roll over

all of the currency swaps that expire early in December.

Other regional currencies also rose after China unveiled its

boldest set of economic and social reforms in nearly three

decades, fueling optimism that the largest consumer of Latin

American commodity exports will achieve sustained economic

growth during the next several years.

"Investors approved of the Chinese measures as they see them

as a way for the country's economy to become more competitive,

which will favor commodity-related currencies," said Luciano

Rostagno, chief strategist of Mizuho bank in Sao Paulo.

* Brazil's real gained 2 percent to 2.2755 per

dollar as traders bet the central bank will roll over all of the

$10.1 billion worth of currency swaps that mature on December 2.

The bank has been regularly selling those contracts to provide

investors with protection against a possible depreciation of the


* Brazilian policymakers later on Monday will offer 20,000

currency swaps worth about $1 billion in the fourth auction of

that type to roll over the maturing swaps. "It's already

expected that the central bank will roll over all of the

maturities and that is providing some relief to the exchange

rate," said Jaime Ferreira, currency desk manager at Intercam, a

brokerage in Sao Paulo.

* Chile's peso rose 0.7 percent after Michelle

Bachelet won the first round of presidential elections but

looked set to face an uphill battle to push through an ambitious

reform program that includes raising taxes.

* Bachelet's push for higher taxes has weighed on the peso

in the past few days. But local traders said Monday's gains were

mostly driven by external markets as the election's result was

broadly in line with expectations.

* Mexico's peso firmed 0.4 percent in

overseas trading as a local holiday kept Mexican traders out of

the market.

Latin American currencies at 1600 GMT

Currencies daily % YTD %

change change


Brazil real 2.2755 2.00 -10.35

Mexico peso 12.8775 0.36 -0.10

Chile peso 517.4000 0.70 -7.48

Colombia peso 1917.550 -0.02 -7.90


Peru sol 2.7990 0.04 -8.86

Argentina peso 5.9950 0.00 -18.06

Argentina peso 9.8500 0.91 -31.17