Brazil’s Real Declines Ahead of Central Bank Currency Fixing
- Currency heading for a monthly decline, after rising 12% June
- Central bank intervenes in market with reverse FX swap sale
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Brazil’s real dropped amid speculation banks are buying dollars in an attempt to control a central bank rate used in settling some financial contracts.
The real declined 0.9 percent to 3.2918 per U.S. dollar on Thursday. The currency is on course for a 2.4 percent monthly decline, after having risen 12.4 percent in June. Brazil’s central bank placed all 10,000 reverse swaps contracts offered in an auction this morning, a move equivalent to buying $500 million in the futures market, which also tends to weaken the real.