Market expectations for Brazil’s IPCA inflation showed a decline from a 2007 median forecast of 4.07% last week to 3.97%. Such expectations have led analysts to predict a cut in interest rates in the medium term.
Columbia’s central bank announced $1 billion worth of acquisitions in the spot market to stabilize the local currency. This accounts for the depreciation of the Colombian Peso (COP) by 1.1% in January. Such market intervention was needed to offset foreign currency payments for the sale of government assets with local reports suggesting political fallout between the Finance Minister and Bank officials.
Poland’s current account deficit in December was EU 915 million against market predictions of only a EU 505 million deficit, leading to a deficit of 2.1% of GDP in 2006. Exports also declined severely that month by 22%, although analysts expect a recovery.
An auction for the January 2011 bond is being re-issued by the Turkish Treasury. The size is unclear but the auction is an important event to gauge investor interest ahead of the 5-year CPI-linked bond issuance on February 19.
The Nigerian government confirmed an IMF-negotiated deal on total external borrowing which is limited to $1.5 billion (1.1% of GDP) in 2007 and $2.0 billion in 2008 (approx 1.3% of GDP). The annual interest rate of borrowing is capped to 3%.