Dollar Retreats to R$4.21 After Sale of US$1 Billion by Brazil’s Central Bank

RIO DE JANEIRO, BRAZIL – The spot US dollar renewed the low of R$4.21 (-0.7 percent), reacting to the sale of US$1 billion in the spot market by the Central Bank, after the authority rejected the bids in combined spot auctions of US$785.0 million, with a reverse swap offer.

The president of the Central Bank, Roberto Campos Neto, had already concluded his speech at an event in Brasília, but did not comment on the exchange and interest rates and left without talking to the press.

The spot sale auction is the fourth this week, after the dollar soared to R$4,270 in the highs of Tuesday and Wednesday, forcing the Central Bank to deploy its artillery to try to contain the US currency’s momentum, which has been closing at R$4,250, a record since the adoption of the Real Plan.

According to foreign exchange operators, the trigger for the dollar’s rise was the minister of economy, Paulo Guedes, who said that the dollar above R$4.20 is not worrying and that “it is good to get used to the higher dollar and lower interest rates”.

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