Brazil real hits new low despite central bank intervention
RIO DE JANEIRO
RIO DE JANEIRO Aug 16 (Reuters) - The Brazilian real fell to its weakest in over four years on Friday even as the central bank started rolling over some $5 billion in traditional currency swaps, derivatives that emulate a sale of dollars in the futures market.
The bank initially offered to sell as many as 20,000 swaps maturing in April 2014 to replace part of the 100,800 contracts that will expire on Sept. 2, but the real barely budged on the news.
It last traded at 2.3549 per U.S. dollar , its weakest since March 2009. At that level, the real is 0.7 percent weaker than it closed on Thursday and more than 13 percent down from the beginning of the year.
Soma analysts have said that only stronger central bank intervention, probably with dollar sales on the spot market, would be able to halt the real's depreciation.
But, in a Thursday statement announcing plans to roll over expiring swaps, the bank said it would continue with its policy of intervention in the currency futures market.