Brazil's real again ends at new forex band's limit
Reuters, Thursday, January 14, 1999 at 16:24
SAO PAULO, Jan 14 (Reuters) - Brazil's currency, the real,
closed at 1.32 reais to the dollar in the commercial foreign
exchange market on Thursday, ending at the outer limit of the
Central Bank's new forex band for the second straight day,
traders said.
Brazil's Central Bank on Wednesday devalued the real by
scrapping the forex mini-band and replacing it with a new,
wider maxi-band, whose limit was set at between 1.2 and 1.32
reais per dollar.
Traders said expectations of further dollar outflows from
the country's currency markets kept the real weak, and the
Central Bank had to sell dollars in forex markets to prevent it
from breaching the new band.
Nervousness in the market, one day after the government
devalued the real, fueled dollar outflows from markets, traders
said. A net $1 billion was estimated to have been pulled out of
markets on Thursday.
The real also finished at 1.32 per greenback in the
floating market, after the Central Bank sold dollars to prevent
the local currency from weakening further.
In the parallel market, or black market, the real weakened
0.36 percent to close at 1.38 reais.
In the futures' market, February dollar futures contracts
rose 1 percent to 1.25 reais, as more investors sought the U.S.
currency, traders said.
sao.paulo.newsroom@reuters.com))
Copyright 1999, Reuters News Service
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