Central Bank manages to prop up the Brazilian Real

Fall of Brazilian currency, the Real, is 'no reason to panic'
Image: Rafastock/Shutterstock

The Brazilian currency finished the day 1.3 percent up against the U.S. Dollar as the best performer in emerging markets, with the Central Bank wading into forex markets with repo operations and spot auctions. The currency ended the day at BRL 5.02 to the dollar. 

According to newspaper O Globo, the monetary authority purchased USD 3 billion in Brazilian external debt bonds from local banks. This helps provide more liquidity to the local market but doesn’t harm the Central Bank, as the institutions have the commitment to buy back the bonds in the future.