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Brazil's central bank president said the country is ready to sell foreign exchange reserves to keep intervening in the currency market if needed. Any bond market intervention would be much smaller.
The real had lost about 30% of its value against the dollar this year.
FX intervention can slow the real's decline, which helps contain the local cost of dollar-priced feed and fertilizer imports. Limited bond buying means the central bank is not signaling a major shift in monetary support.
brecorder.comMay 31, 2020After 13 past bearish policy events, USDBRL moved a median -3.4% over 5 sessions (15% higher; middle half -3.4% to -1.3%), and -1.9% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
The central bank's readiness to sell FX reserves and intervene supports the real by reducing disorderly depreciation risk and boosting dollar supply.
