O Banco Central announced that it will hold a new dollar auction with a repurchase commitment on Monday (16), when US$3 billion will be offered to the market in what will be the third consecutive trading session with exchange rate interventions.
In a statement released on Friday (13), the BC stated that proposals for the line auction will be accepted from 10:20 am to 10:25 am on Monday. The municipality’s sales operations will be settled on Wednesday (18) and purchase operations, on March 6, 2025.
On Thursday (12), the BC had already sold US$4 billion in two line auctions. Earlier this Friday, another US$845 million was sold in a cash auction, with no repurchase commitment.
Despite the actions of the monetary authority, the dollar closed high in these two sessions, even after the Monetary Policy Committee approved a increase of 1 percentage point in interest ratesto 12.25% per year, and announced the intention to approve two increases of the same magnitude in the next meetings.
In theory, the higher the interest rate, the greater the attractiveness for foreign investments, which tends to stimulate the inflow of dollars, but market operators have argued that concerns about the sustainability of public debt have kept investors away.
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In this Friday’s spot auction, the BC reported that 9 proposals were accepted between 2:41 pm and 2:46 pm, with a sales cut-off rate of R$6.02 per dollar. In the statement announcing the auction, the monetary authority said that the minimum lot would be US$1 million.
The municipality did not mention the reason for holding the auction, which contributed to slowing the rise of the dollar in the session.
The last spot dollar auction — which does not have a repurchase commitment — had taken place at the end of August, when the BC sold US$1.5 billion. At the time, the president of the BC, Roberto Campos Neto, stated that the operation had occurred due to an “atypical flow” of dollars resulting from a rebalancing of the market index.
Members of the authority have repeatedly stated that interventions in the exchange rate only occur in cases of dysfunctionality or to deal with atypical flows.
Before the auction took place this Friday, the US currency rose more than 1%, above R$6.07, amid market pessimism regarding the fiscal scenario, in which there are doubts about the government’s commitment to balance of public accounts and the processing of the fiscal package in Congress.
During the auction this afternoon, the rise in the dollar slowed down sharply and almost gave back all of the session’s gains, reaching around stability against the real, before rising again.
The spot dollar ended the day up 0.28%, quoted at 6.0295 reais. During the week, the United States currency lost 0.78%.
