Brazil Real Weakens Beyond 1.80 for First Time Since January

By Adriana Brasileiro

Sept. 11 (Bloomberg) -- Brazil's real weakened beyond the 1.80-per-dollar level for the first time since January after a split vote by central bank directors yesterday signaled the pace of interest-rate increases may slow.

The real dropped 1.9 percent to 1.8222 per dollar at 8:57 a.m. New York time, from 1.7878 yesterday. The currency earlier touched 1.8237, the weakest since Jan. 23.

Brazilian policy makers raised by a vote of 5-3 the benchmark overnight rate to 13.75 percent from 13 percent in a bid to control inflation. The three dissenters voted for a half- point increase. The bank has raised the rate four times this year, bringing it up from a record low of 11.25 percent in April.

The yield on Brazil's zero-coupon bonds due in January 2010 fell 7 basis points, or 0.07 percentage point, to 14.73 percent, according to Banco Votorantim. The yield on the overnight futures contract for January delivery rose 5 basis point to 14.01 percent.

To contact the reporter on this story: Adriana Brasileiro in Rio de Janeiro at abrasileiro@bloomberg.net