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Bruna Serra Fernandes, director of monetary policy at Brazil’s central bank (BCB), has announced that the BCB will sell a total of US$3.845bn in foreign exchange reserves. The reserves will be sold on the spot market between 21 and 29 August. The sale will be part of a foreign exchange swap, and the equivalent quantity of US dollars will be purchased in the futures markets. This marks a change in monetary policy as it is the first time the BCB has sold dollar from its reserves since 2009. The measure is designed to mitigate currency volatility and satisfy demand for dollars following a sharp depreciation of the real, which closed the day yesterday at R$4.04/US$1. Serra Fernandes noted the intervention does not affect the BCB’s commitment to maintaining a floating exchange rate.
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