Brazil central bank holds auction to buy dollars

SAO PAULO, June 29 (Reuters) - Brazil's central bank will hold an auction on Friday to buy U.S. dollars on the spot foreign exchange market as part of an ongoing effort to build up international reserves.

The Brazilian currency, the real BRBY, fell 0.68 percent to 1.935 per dollar after the announcement. The real has traded below 2.0 per dollar since May 15, when it broke that level for the first time in six years.

The bank has aggressively bought dollars over the past year to increase reserves and, indirectly, blunt the real's gains. It has bought nearly $49 billion on the spot market so far in 2007, surpassing the $35.1 billion it bought in all of 2006.