Rates Rise As Brazil Sells BRL1.25B NTN-Bs At 6.26%-6.83% - WSJ.com

Rates Rise As Brazil Sells BRL1.25B NTN-Bs At 6.26%-6.83%

BRASILIA (Dow Jones)--Brazil's federal treasury sold BRL1.25 billion($714.2 million) worth of NTN-B inflation-linked bonds on auction Tuesday at a slightly higher range of interest rates than seen at recent auctions.

The government sold bonds with six maturities ranging from Nov. 2011, to May 2045 at average interest rates ranging from 6.26% to 6.83%. Those compared with rates ranging from 6.16% to 6.78% at an auction of similar maturities held on Nov. 24.

NTN-B bonds pay a rate equal to Brazil's official IPCA inflation rate plus an interest rate established at the auction.

Traders said the yields seen at Tuesday's auction reflected expectations of gradually accelerating inflation and rising interest rates for the coming year.

Brazil's 12-month IPCA consumer price inflation through mid-November rose 4.09% versus a 4.14% advance in the same period through mid-October.

The latest figure remained below the government's official inflation target of 4.5%, however recent market estimates have pointed toward accelerating inflation in the year ahead.

According to a weekly central bank market survey released Monday, IPCA inflation is seen ending 2010 at 4.48%. The same survey shows the country's reference Selic interest rate rising to 10.6% annually from a current 8.75%.

-By Gerald Jeffris, Dow Jones Newswires; (5561) 3335-0832, gerald.jeffris@dowjones.com"