The Brazilian central bank has auctioned off thousands of currency swaps over the past four days as the real hit its lowest point in three years on Wednesday. The bank only managed to sell 14,000 of the 40,000 swaps contracts, but the auctions had the desired effect of helping to support the real's value, if only slightly.
"The central bank is offering more swaps than the market is absorbing," Darwin Dib, chief economist at CM Capital Markets Asset Management, told Bloomberg. "If investors aren’t buying all the swaps offered in the auction, it’s because they aren’t very convinced that this level of the real is sustainable."
The real has lost more against the dollar than any of the top-traded currencies in the world, falling 6.6 percent even after gains early Friday brought it above two real per dollar.
The Wall Street Journal reports that the country has suffered significantly from market uncertainty surrounding the ongoing Greek debt crisis.
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