RIO DE JANEIRO Oct 16 Brazil's real trimmed its
gains to close only modestly stronger on Wednesday as a delay in
the announcement of an expected swap auction by the central bank
triggered speculation that policymakers were reviewing their
program of daily currency interventions.
Brazil has been auctioning as many as 10,000 currency swaps
on Mondays through Thursdays as part of a $60 billion
intervention program designed to provide investors with
protection against a possible depreciation of the real.
Doubts about the swap offering increased, however, when the
central bank failed to announce, before markets closed on
Wednesday, the details of the contracts that would be sold on
the following day.
The bank usually issues a statement with such details around
2:30 p.m. local time (1730 GMT) on the day prior to the sale.
This time, however, that statement was only released after 8
p.m., when the bank announced it would sell on Thursday 10,000
traditional swap contracts maturing on March 5, 2014.
That came too late to ease the pressure on the Brazilian
currency, however. After rallying over 1 percent to a four-month
high of 2.1551 per dollar during the session, the real
closed only 0.2 percent stronger at 2.1735, lagging
other Latin American currencies.
Although many investors believe the government is not
completely comfortable with the recent strength of the currency,
central bank chief Alexandre Tombini has repeatedly said that
the current intervention program is working as expected and will
last until the end of the year at least.