There have been speculations that Brazil will be stepping in the futures market because of a rally in the Brazilian real, which lasted for two months.
This will be the first time in 14 months that the central bank will be buying dollars in the futures market.
According to BNP Paribas, Nomura Securities International Inc. and CM Capital Markets, central bank officials want currency traders to estimate their demand for reverse currency swap. These so-called currency swaps lets policy makers sell the real for dollars in the future market.
The highest increase in the real since October is the 6.2 percent appreciation of the real in the past two months. This appreciation, according to BNP Paribas, drives central bank President Henrique Meirelles to raise the efforts in gaining and protecting exports after the latest account deficit hits a record high in June.
According to Flavia Cattan- Naslausky, a currency strategist with RBS Greenwich Capital Markets in Stamford, Connecticut, the central bank has been aggressively intervening in the spot market, but still it is not enough.
She also added that their efforts are not working. They may give a signal to the market that they are ready to make more actions. “The market should be worried.”
The current account deficit will cause a “devaluation” of the real, said Finance Minister Guido Mantega to reporters in Brasilia. It was up to the central bank as he favors buying dollars in the futures market, he added.
