Brasília – The Central Bank of Brazil (BC) has disclosed the third volume of the International Reserve Management report, for the month of June, as a way of “expanding the transparency” of the foreign currency administration process. The document shows that reserves grew 20.7% last year as against 2009. The expansion, however, reached 22.18% this year up to Thursday (18), according to the daily bulletin that the monetary authority issues on the Internet.
The country’s foreign reserves have, up to the moment, reached US$ 352.59 billion, growth of US$ 64.02 billion as against the US$ 288.57 billion at the end of last year, as a result of daily Central Bank purchases on the spot market in an attempt to control greater depreciation of the dollar against the Brazilian real. After all, depreciation of the dollar is bad for Brazilian exports and favours imports, generating an imbalance for Brazilian industry.
The BC report says that the expansion of international reserves is part of an exchange policy that is aimed at reducing the country’s liability to exchange risk and the matter of funds is anchored on a "solid governance system”. However, the cost of establishing reserves was 26 billion Brazilian reals last year, as the profitability of reserves was 1.82%, but the country paid interest of 7.74% on the papers in which the reserves were invested.
*Translated by Mark Ament
