Brazil’s international reserves fell this month to US$ 326 billion, according to the Central Bank (BC). It is the lowest level in 11 years. International reserve is the amount a country has in foreign currency. The values work as an “insurance” for obligations abroad.
As of April 25, 2011, Brazil had US$326.22 billion in international reserves. From there, the amount increased until September 27. Between September 9 and October 10, the decline amounts to almost US$ 12 billion.
After falling in the first two years of the government of Jair Bolsonaro (PL), Brazil’s international reserves showed a positive balance last year. They rose from $355.6 billion in 2020 to $362.2 billion in 2021.
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According to economists, central banks use these reserves to try to control the prices of highly liquid assets, such as the dollar. If the BC thinks the dollar is too cheap, it goes to the market and buys dollars, making the price go up and accumulating reserves. If he thinks the dollar is too expensive, he goes to the market and sells the dollars from his reserves, trying to bring the price down. Therefore, the amount of reservations varies.
Currently, dollar reserves in Brazil have fallen because the BC has tried to prevent the dollar from rising. In Brazil, the dollar greatly influences inflation, which is already high. To prevent inflation from increasing further, the BC sells dollars from its reserves, reducing the stock of reserves.
For some economists consulted by the reportage, the dollar in Brazil has varied smoothly and, although reserves are low, evaluating the historical series, there is an upward and downward variation in the short term, which is normal. In addition, analysts argue that Brazil’s external accounts, including debt, are in a comfortable situation.
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