(Adds background, details, updates price of real through close,
By Patricia Duarte
SAO PAULO, March 26 The Brazilian central bank
has no target level intended for its local currency and no plans
to change its daily forex intervention program, a member of the
government's economic team told Reuters on Wednesday.
An initial partial sale of currency swaps - derivatives that
provide hedges against currency losses - raised speculation on
Wednesday that Brazilian policymakers could become less
aggressive in their currency intervention as the real
climbed to four-month highs.
"There are no changes (to the FX program) ... There was no
message intended, no floor or ceiling for the currency," said
the official, who asked not to be named in order to speak
Shortly after the central bank's regular swap auction, in
which it sold 2,400 of the 4,000 contracts offered, the bank
conducted an additional auction in which it managed to sell the
remaining 1,600 contracts.
Still, many analysts interpreted the move as a sign that
policymakers are not willing to let the currency gain past the
key 2.3-per-dollar level.
Although a stronger real helps the central bank battle
inflation by reducing the price of imports, it also increases
costs for local exporters.
Standard & Poor's cut Brazil's sovereign rating on Monday in
part due to the country's inability to bolster an economy that
also struggles with high inflation.
The official said the bank decided to carry out an
additional auction after it first received "bad" price offers
for the swaps.
The central bank started its daily intervention program in
August, but slowed its pace this year with policymakers offering
$1 billion worth of traditional currency swaps per week.
The real closed up 0.5 percent at 2.3064 per U.S. dollar,
bouncing from a session low of 2.2926.
(Reporting by Patricia Duarte; Writing by Alonso Soto; Editing
by Meredith Mazzilli and David Gregorio)