Brazil Real Posts Best Month in 13 Years as Traders Snub Swaps
- Central bank places one-sixth of reverse swaps in auction
- Currency also rises as Brazil signals no room to cut rates
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Brazil’s real posted its biggest monthly rally since 2003 after the central bank sold just a fraction of the contracts it offered to protect against a decline in the currency, indicating traders are still betting on appreciation.
The real rose for a second day after the central bank sold 2,900 out of 17,000 foreign-exchange reverse-swap contracts offered Thursday. Auctioning the securities is equivalent to buying dollars in the futures market. The real also climbed after policy makers said they see no room for cutting borrowing costs. Along with the Brazilian currency, most of its major counterparts climbed against the dollar amid speculation that the Federal Reserve will be cautious when raising interest rates.