Brazil Cenbank seen intervening in forex markets
Reuters, Thursday, September 03, 1998 at 16:16
SAO PAULO, Sept 3 (Reuters) - Brazil's Central Bank was
seen selling dollars in the local foreign exchange markets in
late trade Thursday in a bid to calm nervous investors amid a
global economic fears, traders said.
The bank was seen intervening through state-owned Banco do
Brasil, selling the U.S. currency at around 1.1780 to the
dollar, traders said.
The Central Bank would not comment on the reported dollar
sales.
The real opened at 1.1780 to the dollar, or 0.08 percent
lower than Wednesday's close, and stayed hovering around that
level for most of the day until the Central Bank reportedly
stepped in to prevent the currency from falling further.
The real was still trading at 1.1780 by 1655 local/1955
GMT.
Forex dealers said the commercial foreign exchange market
was suffering a large net outflow of dollars amid an escalating
crisis.
"The continuous outflow of dollars is scary. And news that
Moody's cut its credit rating on Brazilian debt fell like a
bomb on the market," one local dealer said.
Moody's Investors Service said it downgraded its credit
ratings on the country's foreign currency debt to B2 from B1.
Dealers said there was practically no expectation for a
dollar inflow in the market under the current situation.
In the local futures market, October dollar contracts were
trading up 0.16 percent, while November contracts were trading
up 0.21 percent, meaning the U.S. currency's value was seen
rising more in the near future.
The local bourse was also reflecting the nervousness in
Brazilian markets. The key Bovespa index (INDEX:$BVSP.X) was down 8.45
percent at 6,230 points shortly before the session's close.
Brazil's dollar-denominated C-bonds <BRAZILC=RR> traded in
New York, was down 0.750 points at 54.75 at 1700 local/1800
gmt.
noriko.yamaguchi@reuters.com))
Copyright 1998, Reuters News Service |
