Overnight Rate


Embratel, based in Rio de Janeiro, sold three-year bonds linked to the country’s overnight interbank rate on Oct. 8. With that rate trading at 10.64 percent yesterday, the bonds yield about 11 percent. By comparison, government floating-rate bonds due in 2013 pay yields in line with the overnight rate while its fixed-rate securities yield 11.82 percent, according to data compiled by Bloomberg.

Central bankers left their overnight rate target at 10.75 percent at a policy meeting yesterday after raising it 200 basis points, or 2 percentage points, from a record low earlier in the year to prevent the expansion from sparking a surge in inflation. Brazil’s benchmark target compares with rates of no more than 1 percent in the U.S., Europe and Japan.

Yields on Brazil’s interbank rate futures contract due in January 2012 rose four basis points to 11.31 percent today at 11:21 a.m. New York time.

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