Brasília – The Brazilian Central Bank said on Thursday (14) that it will offer an additional USD 10 billion in currency swap contracts starting next week. The move is designed to increase foreign exchange market liquidity in a bid to prevent volatility in US dollar prices. Thursday saw the dollar close up 2.5% to BRL 3.8119, the highest price in 13 months.
“The amount [USD 10 billion] may change up or down, depending on market prices. The Central Bank reaffirms that it does not see why currency swaps cannot considerably exceed the maximum volumes from the past,” the Bank said in a press release. Apart from the 0.25% interest rate hike announced by the Federal Reserve on Wednesday, news that the European Central Bank is ending its bond purchase program at the end of the year have drove dollar prices up in Brazil.
“The Central Bank will continue to keep track of foreign exchange market conditions and working to provide liquidity and ensure the market is working properly,” the press release reads.
Translated by Gabriel Pomerancblum
