By Walter Brandimarte
    RIO DE JANEIRO, May 4 (Reuters) - The Brazilian real lost 2 percent early on
Monday after the central bank signaled it will reduce the roll over pace of
currency swaps that expire in June, cutting the amount of currency hedge it
offers to investors.
    The real weakened to as much as 3.0826 per dollar early on Monday,
contrasting with a 0.3 percent gain in the Mexico peso, after the central
bank announced on Thursday that it will auction as many as 8,100 swaps this
morning to roll over similar contracts that expire on June 1. 
    If the bank continues to sell the same number of contracts per day until the
end of May, it will roll over about 80 percent of the $9.66 billion worth of
swaps that mature early next month.
    Brazilian financial markets were closed on Friday for the Labor Day holiday
so the impact of the central bank announcement was only felt this morning.
    In a step to remove policies that kept the real artificially overvalued, the
central bank in late March ended its forex intervention program, which consisted
of selling a daily amount of currency swaps.
    It said on that occasion, however, that it would continue to roll over the
stock of outstanding swaps. In April, it renewed nearly 100 percent of the swaps
that expire in the beginning of May.

    Key Latin American currencies at 1240 GMT:
    
 Currencies                             daily %    YTD %
                                         change   change
                                Latest           
 Brazil real                    3.0740    -2.02   -13.55
                                                 
 Mexico peso                    15.534     0.28    -5.09
                                                 
 Chile peso                      613.7    -0.36    -1.19
                                                 
 Colombia peso                    2390     0.00    -0.08
 Peru sol                         3.13     0.00    -4.82
                                                 
 Argentina peso (interbank)     8.9050    -0.03    -3.99
                                                 
 Argentina peso (parallel)       12.65     0.63    10.67