Brazil’s central bank said on Wednesday it would sell dollars outright in the spot currency market this month for the first time in over a decade, changing its regular market operations in response to rising demand for liquidity. Report informs citing the TASS that the operation would match the $3.84 billion in currency swaps contracts expiring in October but which have not yet been rolled over. In a statement on its website, the central bank said it would sell up to $550 million daily in the spot market along with reverse swaps of the same value from Aug. 21-29.
The announcement came on the day Brazil’s real fell 2% to below 4.05 per dollar for the first time since May and currency market volatility jumped as U.S. recession fears and market turmoil in Argentina took their toll on local assets.
A central bank spokesman said this would be the first outright sale of dollars since February 2009.