Brazil Real Drops Second Day as Central Bank Acts to Ease Rally
Brazil’s real fell for a second day on speculation the central bank will continue to intervene to contain the currency’s gains.
The real strengthened 0.1 percent to 1.7276 per U.S. dollar at 9:43 a.m. in Sao Paulo, from 1.7257 yesterday.
Policy makers bought dollars in the foreign-exchange market for a second day yesterday, paying an average of 1.7170 reais each for an unspecified amount. The central bank bought dollars in the forwards market on Feb. 3, the first transaction of that type since July.
“The central bank is the only buyer of all the dollars that are entering the country,” Alfredo Barbutti, an economist at Liquidez DTVM Ltda., said by phone from Sao Paulo. The bank’s actions make investors more cautious about betting on the real’s depreciation, Barbutti said.
Yields on the Brazilian interest-rate futures contract due in January 2013 slid two basis points, or 0.02 percentage point, to 9.48 percent.
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