The dollar opened lower this Tuesday (2), amid an additional “currency swap” auction carried out by the Central Bank of Brazil (BC) to contain part of the advance of the North American currency in the country.
In practice, this operation means that the BC will sell dollars on the futures market, without involving Brazilian currency reserves. It is an indirect intervention by the institution in the foreign exchange market, which occurs when the dollar rises more sharply.
See below for a summary of the markets.
Yesterday, before the BC’s announcement about the exchange auction, the currency closed the day at around R$5.06, the highest level since October.
At the same time, Ibovespa was down 0.02% at 126,961 points.
The day before, the index had closed at 126,990 points.
Understand what makes the dollar rise or fall
What’s moving the markets?
The BC announced on Monday night that it would hold an additional auction of traditional currency swaps in this session, worth US$1 billion. This was the municipality’s first non-rollover intervention in the foreign exchange market since the end of 2022.
The BC justifies that it held the auction to meet the demand for the maturity of NTN-A3, a public bond indexed to the dollar that has not been traded by the National Treasury for years, but there are still institutions in the Brazilian market that hold the paper in their portfolios.
In current values, the outstanding shares are equivalent to around US$3.6 billion to US$3.7 billion, according to market participants. To close the positions, a purchase of dollars is made, with the potential to fuel the rise of the US currency.
Some analysts attribute the action solely to the fact that the dollar jumped 0.86% the day before, to its highest closing value since October 13th of last year. The accumulated increase was 1.57% in two business days.
Tags: Dollar opens auction rise currencys price Brazil Economy
