MercoPress. South Atlantic News Agency

Brazil’s central bank just manages to slow the Real currency advance

The Real was at its highest level since August 2008

Brazil’s Real retreated from the highest level since August 2008 after the central bank intervened five times Thursday to slow the currency’s advance. The Real fell 0.2% to 1.6318 per dollar, from 1.6288 Wednesday.

The Real has gained 42% since the end of 2008, the biggest advance among 25 emerging-market currencies tracked by Bloomberg. Brazil’s currency strengthened 1.8% in the first quarter of this year.

The central bank said it bought dollars for immediate delivery three times Thursday: the first time for 1.6262 Real each, the second for 1.6285 each, and a third time for 1.6300. The bank also auctioned reverse currency swaps, placing 6,600 contracts of 30,000 offered, after rejecting all bids in an earlier auction.

“There’s a clash between the central bank and the market,” said Francisco Carvalho, currency director at Sao Paulo-based BGC Liquidez, the second-biggest currency brokerage on the BM&FBovespa SA exchange.

Central bank President Alexandre Tombini told lawmakers that it’s hard to prevent the Real from appreciating given the attractiveness of the economy as an investment destination, Lower house representative Claudio Puty said after meeting with Tombini.

The yield on interest-rate futures contracts due in January, the most traded Thursday, were unchanged at 12.12%.