The Brazilian real advanced today as the central bank auctioned currency swaps in a attempt to keep the real, which was the worst performer among 16 most-traded currencies, from sliding down and hurting consumers.
The Central Bank of Brazil sold 14,000 out of the 40,000 currency swap contracts on May 25. That was the fourth day of swap auction. Speculations that the central bank will slow the pace of borrowing cost cuts boosted yields on interest-rate futures. Experts say that the bank would sell swaps again if the currency will depreciate further to prevent excessive increase of consumer price inflation.
USD/BRL fell from 1.9878 to 1.9803 as of 16:59 GMT today.
If you have any questions, comments or opinions regarding the Brazilian Real, feel free to post them using the commentary form below.