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.

To contact the reporters on this story: Josue Leonel in Sao Paulo at; Ney Hayashi in Sao Paulo at

To contact the editor responsible for this story: David Papadopoulos at

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.