* Brazil’s central bank (BCB) has announced that it would hold US dollar reverse swap auctions and sell more dollars in the spot market in December as part of efforts to restructure existing currency swap agreements due to expire in February 2020. According to a BCB statement, the bank will offer up to US$7.5bn during daily auctions between 2 and 20 December. The statement says that the objective of the operation is to renew the swap agreements expiring in February and at the same time increase the US dollar supply in the spot market. The BCB has already sold US$34.4bn in the spot market since August in support of the real, which has been rapidly depreciating against the dollar to reach record lows. While the BCB is clear that the new operation will not affect the exchange rate, it should stabilise the domestic currency market albeit at the expense of BCB international reserves.
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