O central bank announced this Monday, the 1st, that it will begin an intervention in the foreign exchange market after the dollar rises above R$5.05. This was the highest exchange rate since October last year. The monetary authority will also hold an additional auction of up to 20 thousand currency contracts swap exchange rate, the equivalent of US$ 1 billion.
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This type of operation corresponds to the sale of dollars on the futures market and ensures the necessary supply to meet the increased demand for the currency. The maneuver also stimulates balance in the foreign exchange market.
The dollar rose around the world after the upward revision of the United States’ Gross Domestic Product (GDP) in the fourth quarter of last year. Economic data presented stronger results than expected. The increase in activity complicates the Federal Reserve’s (Fed) task of cutting the country’s basic interest rates, which increases investor apprehension and boosts prices.
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The dollar’s rise in March was 0.86%. In the year to date, the appreciation reaches 3.35%. In the international market, the real was the most penalized of a list of 33 currencies.
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Redemption of public title
In a statement, the BC informed that its interference will meet a demand generated by the redemption of the public bond NTN-A3, which is linked to the exchange rate. It has not been traded by the National Treasury in recent years, but some institutions keep the paper in their portfolios.
“The conditions for operating the auction will be disclosed through a statement from the Open Market Operations Department (Demab)”, states an excerpt from the bank note.
