Reuters: US Dollar Report: UPDATE 1-Brazil aims for real-denominated global bond sale

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UPDATE 1-Brazil aims for real-denominated global bond sale Mar 23rd 2012, 20:08 Fri Mar 23, 2012 4:08pm EDT * Real-denominated debt abroad to ease real appreciation * Next global bond sale could have 10-year maturity * Treasury warns more currency measures are on the way By Alonso Soto and Luciana Otoni March 23 (Reuters) - Brazil sees a "high probability" that its sale of global bonds in coming weeks will be denominated in reais to help further ease the value of the local currency, the country's Treasury chief told Reuters on Friday. Arno Augustin said the debt sale will likely have a 10-year maturity. "This is the best option for us because it does not appreciate the real," he said in an interview in Brasilia. Brazil has stepped up its fight to tame the appreciation of the real, which hikes costs for local industries and makes foreign imports cheaper. President Dilma Rousseff has said a "tsunami" of cheap credit flowing from rich nations is bolstering the value the real and undermining local industries. The real has more than halved its year-to date gains this year after government action in recent weeks, but Augustin warned of more action ahead. "We will continue to act because it is necessary... we will continue with this process because we don't want an over-valued currency," Augustin said. He said the Treasury could speed up and increase the amount of dollar-denominated foreign debt buybacks to reduce the flow of dollars to the local market. He has said the government could buy back all $15 billion of foreign debt with maturities of up to 2015. The Treasury could also use cash from its sovereign fund to mop up excess dollars in the local market. Link this Share this Digg this Email Reprints

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