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The strong upward pressure of the dollar against the real on Wednesday morning, 28, made the Central Bank enter the market to hold the US currency. The BC called for an auction to sell dollars from international reserves and negotiated a total of US $ 1.042 billion with the financial market. With the operation, the American currency, which approached R $ 5.80 before 10 am, ended up retreating to the range of R $ 5.73, and closed the day at R $ 5.7619.
Since the pandemic intensified, between the end of February and the beginning of March, the BC has been promoting dollar sales operations in the financial market to contain the advance of the American currency. The intention is not necessarily to make the price fall, but to prevent it from firing quickly, which could disrupt business. The effect is palliative.
From March until now the institution has sold a total of US $ 23.451 billion of international reserves. In March alone – at the height of concerns about the pandemic -, the institution negotiated US $ 10.674 billion with the market. Despite the high number, experts do not find this worrying, as the level of reserves is at $ 356.6 billion.
But the sale of the dollar in cash is not the BC’s only tool to insure the exchange rate. In the last few months, the municipality has also promoted line operations – sale of dollars with a commitment to repurchase in the future – and swap.
THE swap it is a type of foreign exchange contract that, when traded on the market, has an effect equivalent to the sale of dollars in the future market of the American currency. In practice, it is a way for the BC to sell dollars, but without having to tamper with international reserves – the country’s insurance against crises.
Yesterday morning, the BC negotiated $ 600 million through swaps exchange rates, but the operation was not new. Expected since Tuesday, the auction of swaps it served for the BC to renew contracts, held by the financial market, which are due to expire in early December. As a result, the municipality avoids further pressure from the dollar to rise against the real.
The BC’s performance on Wednesday was a response to the dollar’s strong rise against the real, but also in relation to other currencies of emerging countries or exporters of commodities (basic products). From an early age, global markets were pessimistic about tackling the new coronavirus pandemic. The second wave of Covid-19 in Europe, which hits countries like France, and the contamination data in the USA are factors that threaten the global economic recovery.
In Brazil, the biggest question is whether the government of Jair Bolsonaro will be able to control the fiscal gap. The fear is that, in the end, the country will not be able to balance its accounts and become insolvent in the coming years. This concern ended up causing the dollar to rise more against the real, in comparison with the visa against other currencies.