With the dollar on the rise, Campos Neto rules out that BC intervention seeks to contain exchange rates

The president of the Central Bank, Roberto Campos Neto, said this Wednesday that the exchange rate intervention carried out by the monetary authority this week “had nothing to do” with the movement of the exchange rate, which is floating.

At an event promoted by Bradesco BBI, Campos Neto stated that the operation was motivated by the maturity of public bonds linked to the exchange rate, and that this was expressly highlighted in the BC’s communication, but some of the agents would not have understood.

The monetary authority held an extraordinary currency swap auction on Tuesday, the first intervention under the Lula government. Some analysts downplayed the BC’s actions, while others doubted the authority’s expressed intention of merely meeting a one-off demand generated by the redemption of a bond linked to the exchange rate, as the operation came after a recent jump in the dollar.

“Our intervention had nothing to do with the movement of the exchange rate, we always say that the exchange rate is floating, it is important to be floating because it works as an element that absorbs shocks and redistributes resources more efficiently, but we had an NTN-A that was going to win that we thought was big and could have some dysfunction on the day”, he stated.

Campos Neto said that the BC only intervenes in the exchange rate when it detects dysfunctions in the market and added that Brazil has a strong flow of resources and has reserves and that, therefore, “exchange rate should not be a problem”.

“When we look ‘year-to-date’ (year-to-date), the real is relatively ok compared to emerging world currencies,” he added.

Regardless of whether or not you seek to contain the appreciation of the dollar, this Wednesday the currency has a new session of increase, of R$0.43%, quoted at R$5.080 for purchase and sale.

Meanwhile, year-to-date, the dollar has risen 4.27% against the real, according to data from Tuesday’s closing.