SÃO PAULO – The dollar’s continued declines have led the Central Bank (BC) to announce an intervention in the foreign exchange market. On Thursday, the 30th, the dollar fell 0,83%, trading at R$3,2105. In June, the US currency depreciated 11%. With the new decline, the BC announced, after the market closed, that it would use today an instrument used to contain exchange rate fluctuations, called reverse foreign exchange swap. These operations are equivalent to the purchase of dollars on the futures market and are used to prevent an even greater decline in the US currency.
They serve to dismantle the stock of other operations previously carried out by the monetary authority, the traditional swaps, used by the Central Bank when the objective is the opposite – to prevent an even greater rise in the US currency. The Central Bank has a stock of US$ 62,135 billion in traditional foreign exchange swap contracts. The Central Bank's offer of only US$ 500 million in reverse foreign exchange swap contracts should not have a major impact on the dollar's exchange rate, according to analysts, but will serve to indicate vigilance over the foreign exchange market.
The Central Bank has not offered reverse currency swaps since May 18, one day after the dollar closed at R$3,4895 on the spot market. The market is still trying to identify the floor for the dollar exchange rate under the administration of the new president of the Central Bank, Ilan Goldfajn. During Alexandre Tombini's presidency, the R$3,50 level was seen as a “trigger” for the announcement of reverse currency swap auctions. For trader José Carlos Amado, at Spinelli Corretora, the volume of today's auction is small, in line with the “parsimony” already indicated by Goldfajn. “I don't think the market will start buying the dollar just because there was an announcement of a reverse currency swap. It could be that, because it fell so much, there will be an increase, but nothing with much support”, he stated.
In his assessment, one of the indicators of the opening will be abroad, since next Monday will be a holiday in the US, which could generate some volatility today. In New York, the Secretary of Foreign Trade of the Ministry of Industry, Foreign Trade and Services, Daniel Godinho, assured that the government has not received complaints about the current level of the dollar. He highlighted that the average rate this year is R$3,71 so far. In 2015, it was R$3,34.
DCI – 01/07/2016
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