The Brazilian Real has recovered some ground against the US Dollar after the Brazilian Central Bank intervened in the markets to halt the currency’s rapid decline as speculation builds of a reduction to the Federal Reserve’s monetary easing policy.
The Central Bank of Latin America’s largest economy announced late on Thursday that it had launched a currency intervention programme worth $60 billion to ensure liquidity and reduce the volatility in the nation’s foreign exchange market.
The Bank’s intervention became necessary as investors withdraw from emerging markets as the US Fed prepares to reduce the amount of money it pumps into the global economy. The Real has suffered particularly badly due to a lack of investor confidence in President Dilma Rousseff’s ability to attract foreign investment and cut government spending. The countries recent riots have also scared off some. In the past month alone the Real fell by 9.1% against the Dollar.
While initially welcomed by the Brazilian government, the Real’s rapid decline against the Dollar has started to make policy makers nervous given the danger that it could add to already resilient inflation.
“With the objective of providing currency hedging to economic agents and liquidity to the currency market, the Central Bank of Brazil will start, from this Friday a programme of currency swap auctions and the sale of Dollar repurchase agreements. If judged appropriate, the Central Bank will take additional measures” the bank said in a statement.
Current Real (BRL) Exchange Rates
The Pound Sterling/ Brazilian Real Exchange Rate is currently in the region of: 3.8037
The Euro/ Brazilian Real Exchange Rate is currently in the region of: 3.2545
The US Dollar/ Brazilian Real Exchange Rate is currently in the region of: 2.4358
The Australian Dollar/ Brazilian Real Exchange Rate is currently in the region of: 2.1915
The New Zealand Dollar/ Brazilian Real Exchange Rate is currently in the region of: 1.8994
The Canadian Dollar/ Brazilian Real Exchange Rate is currently in the region of: 2.3065
Correct as of 12:15 pm GMT
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