Brazil forex markets seen losing net $2 bln on Wed
Reuters, Wednesday, January 13, 1999 at 16:27
SAO PAULO, Jan 13 (Reuters) - Brazil is seen losing a net
$2 billion through currency markets on Wednesday after the
Central Bank devalued the local currency, the real, earlier in
the day, traders said.
The Central Bank on Wednesday widened the foreign exchange
trading band, effectively devaluing the real.
By 1810 local/2010 GMT, a net $390 million was pulled out
the commercial forex market, while another net $200 million was
pulled out of the floating market, for a total of $590 million.
Traders said global investors were pulling money out of
Latin America's largest economy after the Central Bank
announced changes in the country's forex policy and Central
Bank president resigned amid the changes.
The Central Bank scrapped the traditional forex mini-band
and widened the maxi-band to allow the real to trade between
1.2 and 1.32 reais to the dollar. The real dropped to the
band's lower limit of 1.32 reais immediately after the
announcement.
The string of news from the Central Bank led investors to
turn their back on Brazil, fueling the dollar flight, traders
said.
Brazil's currency markets lost a net $1.2 billion on
Tuesday, and currency markets have accumulated a net outflow of
$2.27 billion so far this month.
sao.paulo.newsroom@reuters.com))
Copyright 1999, Reuters News Service
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