Brazilian central bank makes first currency swap of the year

The Brazilian Central Bank made its first currency swap contracts of 2017 on Tuesday to avoid volatility for the real against the U.S. dollar due to external factors, the bank announced in a statement.

On Monday evening, the Central Bank announced that it would return to a currency swap, equivalent to the sale of U.S. dollar futures, after studying market conditions.

This is the first intervention in 2017. Last such intervention happened on December 13.

With this intervention, the Central Bank is seeking to avoid possible volatility of the real before U.S. President-elect Donald Trump takes office on Friday.

The contracts emitted Tuesday have a total value of 6.431 million U.S. dollars and will expire on Feb. 1. The bank also did not rule out the possibility of making more such contracts in the coming days.

After the intervention, the real rose by 0.81 percent against the U.S. dollar to trade at 3.21:1.

source: Xinhua