The Central Bank sold all of the US$500 million offered in an extraordinary auction of 10,000 traditional foreign exchange swap contracts held this Tuesday, in an operation announced after the US dollar surpassed 5 reais for the first time in more than a month.
The BC sold 3,250 swap contracts maturing on December 1, 2022 and 6,750 maturing on April 3, 2023.
The operation was announced at 11:45 am (GMT), the same minute the spot dollar hit 5.0003 reais, up 2.53%, in a rapid climb that left the real as the worst performing currency in the world this session. .
Immediately after the announcement, the dollar plummeted, returned below 5 reais and touched a low of 4.9683 reais. In the course of time, however, it regained traction and at 12:50 pm it rose 2.00%, to 4.9743 reais. The Brazilian currency still led, with ease, the losses of the day.
This Tuesday’s net foreign exchange swap offer is the first since the auction held on December 22, 2021. This intervention, however, had been announced the night before. Considering midday auction announcements, this Tuesday’s operation is the first of its kind since October 13, 2021.