Sept. 27 (Bloomberg) -- Brazil's real fell for the first day in five as importers bought dollars at a four-year low amid concern the central bank may resume the sale of reais for dollars soon.
Brazilian importers and companies with foreign bonds due in the next month took advantage of the real's 4.4 percent September rally to buy dollars, said Hideaki Iha at Souza Barros Corretora. The currency also weakened on concern the central bank may soon hold its first currency auctions since Aug. 11.
``The concern the central bank may intervene is there, so much so that the currency isn't fluctuating too much,'' said Iha, chief currency trader at the Sao Paulo brokerage, in a phone interview. ``The possibility the central bank may enter the market is big, but you don't know when that will happen. The market has common sense, so you can't just go on selling reais for dollars because the bank may come in any time.''
The real fell 0.4 percent to 2.2583 per dollar at 3:31 p.m. New York time from 2.2485 late yesterday, its strongest close since May 8, 2001, when the real finished the day at 2.2450. The currency has gained 17.6 percent this year, the best performance among the 16 major currencies.
At 4 p.m. in Sao Paulo (3 p.m. New York time), when most trading in Brazil ends, it exchanged hands at 2.2605 per dollar from 2.2495 per dollar at the same time yesterday.
Currency Purchase
The real climbed yesterday after central bank President Henrique Meirelles said he has no plans to stem the currency's 16-month increase against the U.S. dollar.
Currency traders such as Iha expect the government may act in the currency markets even as Meirelles signaled no plans to sell reais for the dollar.
``All you need is the central bank to give a small sign that the market will retreat,'' Iha said.
The yield to the 2015 call date on Brazil's benchmark 11 percent bond maturing in 2040 rose to 7.86 percent, while the yield to maturity rose to 9.00 percent, from 8.99 percent, according to JPMorgan Chase & Co. The price, which moves inversely to the yield, fell 0.15 cent on the dollar to 121.15 cents.
Meirelles said in an interview Sept. 25 the central bank ``doesn't plan to direct or influence the trend in the exchange rate.''
``We're not here to decide which exchange rate is good or bad for the country,'' Meirelles said in the interview in Washington.
source:bloomberg.com |
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