The inflow of US dollars to Brazil so far this year (Jan-March 4) marks a surplus of 24.3 billion USD over outflows, which helped to further appreciate the Brazilian Real, according to the latest figures released by the Central Bank.
Following on the January record of 15.5 billion USD another 7.4 billion USD poured into Brazil during February and in the first week of March, 1.4 billion USD. This is the result of financial operations mainly by long term foreign investors and Brazilian corporations’ overseas issues.
Central Bank data also shows that local banks are openly speculating in the foreign exchange market that the US dollar will continue to slide against the Brazilian currency. Open market operations jumped from 11 billion USD in January to 12.7 billion USD in February.
However the Brazilian central bank has also been operating in support of the US dollar (and for the depreciation of the Real): it purchased 8 billion USD in January; 9 billion USD in February and so far this month, 2.7 billion USD.
The Brazilian Association of Financial and Capital Market Institutions, Anbima, also confirmed on Thursday that debt and share issuance almost doubled in the first two months of 2011 as local companies accessed capital market to refinance existing debts and to fund expansion plans.
Total capital market activity in January-February period, including both share and debt offers, reached 14.3 billion Real (8.6 billion US dollars) up from 7.21 billion Real in the same period of 2010.
The volume of debt issues totaled 9.77 billion Real in January-February period, while equity issues amounted to 4.52 billion Real.
In 2010, total capital-market activity by the Brazilian companies totaled 238.2 billion Real which is more than double the same period a year ago. In 2009, Brazilian companies issued 110 billion Real in stocks and bonds.