20000219Brazil real ends firmer cheering US inflation data

SAO PAULO: The Brazilian real ended a tad firmer on Thursday, climbing on the back of market-friendly inflation data released in the United States, traders said.

The real finished at 1.773, closing 0.1 percent firmer from Wednesday and ending on a stronger note for the second straight session.

"The real's strength was due to a better inflation picture in the United States," said one trader at a foreign bank in Sao Paulo.

The U.S. government announced the Producer Price Index (PPI) showed a 0.2 percent drop, excluding the volatile food and energy sectors. Economists had expected a 0.1 percent jump in that core rate.

Traders said expectations of capital inflows into the market also brightened sentiment.

A consortium led by Spain's second biggest energy firm Iberdrola agreed to pay 1.78 billion reais ($1 billion) for control of Brazilian utility Celpe in a privatisation auction Thursday.

The Iberdrola group consisted of federal bank Banco do Brasil's investment arm and Previ pension fund.

Iberdrola said its stake in the consortium will be 61 percent. It also said 40 percent of the $1 billion sum will be paid on Feb. 23, while another 30 percent will be paid six months from now.

The Spanish company also announced plans to invest 790 reais ($445 million) over the next five years in Celpe to expand and modernise its operations and to construct a thermoelectric plant which will be operational in 2002.-Reuters