Brazil’s real extended its decline into a third session on Tuesday as traders, concerned about the outlook for commodities prices and local growth, shrugged off the central bank’s efforts to boost the battered currency.
Other currencies in the region were little changed, while stocks moved slightly higher. The real strengthened at the open following the central bank’s announcement after Monday’s close that it would sell up to $2 billion in the spot market on Tuesday with repurchase agreements and hold an unscheduled currency swap auction. Still, the real remained near its weakest level on record,
hovering near 4.13 per dollar.
“It seems that the Brazilian currency market is nolonger accepting ‘more of the same’ when it comes to central bank auctions and is testing the bank for something stronger,” Jefferson Luiz Rugik, a trader with Brazilian brokerage Correparti, wrote in a client note.