Banco Central do Brasil announcements and financial reports

Brazilian Central Bank Sells $8 Billion to Curb Dollar Surge, Plans $7 Billion More on Friday

Dec 19, 2024, 08:18 PM

The Brazilian real experienced significant volatility, with the US dollar reaching a peak of R$6.30 before closing at R$6.12, marking a 2.28% decline. This movement followed the Banco Central do Brasil's (BC) intervention in the currency market, where it sold a record $8 billion in two spot auctions on Thursday, the largest daily sale since Brazil adopted a floating exchange rate regime in 1999. The BC's actions were in response to what its president, Roberto Campos Neto, described as 'atypical' outflows of dollars from Brazil. The central bank announced further interventions for Friday, planning to offer up to $7 billion through a combination of spot and credit line auctions, with $3 billion in spot auctions and $4 billion in credit line auctions. These measures aim to stabilize the currency amid concerns over capital flight and fiscal policy uncertainties. Gabriel Galípolo, the future president of the BC, denied any speculative attack on the real, emphasizing that the market's movements were not coordinated. The real jumped 2.4% on Thursday after the sales, leading emerging market gains.