This is the second time that the Central Bank has intervened in the exchange rate during Lula 3; the dollar closed this Thursday with a 1.2% increase
THE Central Bank will hold a spot auction for the sale of dollars on Friday (August 30, 2024). The maximum value is US$ 1.5 billion. This is the monetary authority’s 2nd intervention in the exchange rate during the 3rd term of Luiz Inácio Lula da Silva (PT).
The auction is expected to last from 9:30 a.m. to 9:35 a.m. It will be referenced based on the Ptax – the official rate used by the monetary authority. Bids may be submitted via from this siteaccording to a statement released on the evening of Thursday (29th August). Here is the full (PDF – 82 kB).
Interventions like this serve to curb the exchange rate of the US currency, as the greater supply of dollars to the market helps to slow down the devaluation of the real.
The dollar closed this Thursday (August 29) at R$5.62, up 1.20% on the day, influenced by fears that the Federal Reserve (US Central Bank) does not carry out a half percentage point cut in the country’s base interest rate. There is an analysis that the drop could be smaller.
The first time the Central Bank intervened in the dollar exchange rate in Lula 3 was in April 2024, when it held an additional auction of 20,000 contracts swap exchange rate.
Understand the difference between the auction modalities of:
- cash sale – direct supply of international reserve currency;
- swap exchange rate – offering of derivatives that works as an injection of dollars into the futures market.
In practice, both operations serve to alleviate the exchange rate during high times. The dollar has been above R$5 since March 28, that is, for 154 days.
Read the rules for Friday’s auction:
- proposal limit – each dealer exchange rate can send up to 3 proposals;
- details of the proposals – must have the desired volume and the difference to be added or subtracted (up to 6 decimal places) from the sales rate;
- dealers exchange rate – participation is optional;
- result – released through a statement in the BC Mailelectronic mail system of the monetary authority;
- accepted proposals – those with a difference greater than or equal to that disclosed in the result. There may be partial acceptance of the volume offered.
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