Brazil's central bank moves to halt currency devaluation
Brazilian central bank, Banco Central do Brasil, acted Monday in a bid to stop fast depreciation of the country's currency against the US dollar.
Rio de Janeiro: Brazilian central bank, Banco Central do Brasil, acted Monday in a bid to stop fast depreciation of the country's currency against the US dollar.
The dollar has been on the rise lately, appreciating 2.3 percent in the past week and 4.94 percent in November. In the first 11 months of 2012, the US dollar appreciated 14 percent against the Brazilian real, reported Xinhua.
The exchange rate reached 2.13 reals to the dollar early Monday and, to prevent a further slide of the real, the central bank decided to make two swap auctions, totalling $2.08 billion.
The measure led to a dollar-real exchange rate of 2.11 reals per dollar by early afternoon.
In January, the exchange rate was at much lower levels, having started the year at 1.86 reals per dollar.
Over the course of the year, the Brazilian government encouraged the appreciation of the US dollar, because a lower real benefited Brazilian exports by making them more competitive on the international market.
Today's measure marks the third time the government has had to step in to halt the dollar's appreciation, which it did when the rate hit 2.12 reals to the dollar, indicating the government may be trying to establish a maximum value to the currency.