Latin American currencies will continue to outperform those in Europe, the Middle East and Africa, Goldman Sachs Group Inc. said. “One of our top trades for the year is based on the theme of EMEA currencies’ underperformance relative to Latam,” Goldman wrote in a report. The Brazilian real is “quite resilient” and will benefit from $36 billion in credit lines announced by the central bank yesterday, according to the report. Brazil’s central bank will offer dollar loans to banks at a rate equivalent to the London interbank offered rate, plus 1.5 percentage points, providing the money is lent out to local companies with foreign debt. The bank forecasts demand for the loans, which seek to ease the effect of the global credit crunch for local companies, will be as much as $20 billion. Companies operating in Brazil carry about $36 billion in foreign debt coming due between October 2008 and December 2009, central bank President Henrique Meirelles said in Brasilia yesterday. The bank will tap international reserves to offer the loans. “Local authorities have a lot of capacity to support domestic demand in Brazil’s heavily underlevered economy and the real could outperform in relative terms,” according to the Goldman report. The real rose 0.7 percent to 2.2664 per U.S. dollar at 10:29 a.m. New York time, adding to yesterday’s jump of 1.1 percent, the biggest gain in over a week.

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