BC announces first exchange rate intervention since the beginning of the Lula government | Economy

central bank Marcello Casal Jr. / Agência Brasil

The Central Bank announced its first intervention in the exchange rate since the beginning of President Lula’s third term. The action takes place after the dollar closed at R$5.06, in trading this Monday (the 1st).

According to the BC, there will be an additional auction of up to 20,000 currency swap contracts, equivalent to US$1 billion. The movement works as an injection into the futures market to protect the real from excessive variations.

• President of the BC, Campos Neto says that the forecast for the June Copom is unclear
• Thirteen ministries will be affected by blocking R$2.9 billion from the government

The instrument is used to avoid dysfunction in the foreign exchange market, ensuring that there is supply to meet the demand for foreign currency

This Monday (the 1st), the dollar rose 0.88%, following the strong rise in American Treasury bonds, after the Easter holiday.