Reuters: US Dollar Report: UPDATE 1-Brazil cenbank acts to keep real above 2/dlr

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UPDATE 1-Brazil cenbank acts to keep real above 2/dlr Oct 23rd 2012, 14:00 Tue Oct 23, 2012 10:00am EDT * Cenbank sells 33,000 swaps to roll over expiring contracts * Bank rolls over about half of contracts, could act again * Real weakens 0.17 pct after intervention SAO PAULO, Oct 23 (Reuters) - Brazil's central bank intervened in the foreign exchange market on Tuesday to prevent the real from gaining past 2 per dollar, a level policymakers consider beneficial for stimulating exports. The bank intervened after a series of small gains led the real to close on Monday at 2.0244 per dollar, its strongest level since Oct. 4. Appreciation by the real then prompted the central bank's last market intervention, on Oct. 5. "The central bank just said 'good morning' to the market. It wants to make it clear that there will be no room for players to make the real even stronger," said Sidnei Nehme, executive director at NGO brokerage in Sao Paulo. The real weakened 0.17 percent after the central bank action, to 2.0279 per dollar. The central bank intervened by selling currency swaps, derivative contracts that emulate the purchase of dollars in the futures market. But the sale, the central bank said, was merely intended to roll over similar contracts that expire on Nov. 1. Traders speculated that the bank could intervene again because it only sold a little more than half of the 60,000 contracts it offered in an auction -- not enough to roll over all the 59,800 reverse swaps that expire next week. The central bank sold 17,000 swaps maturing on Dec. 3, 2012, and 16,000 contracts maturing Jan. 2, 2013, it said in a statement. Link this Share this Digg this Email Reprints

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