On Wednesday, the Central Bank sold US$1 billion in currency sales auctions combined with purchase auctions on the interbank market, in an operation that it resorts mainly to in times of lack of liquidity.
The BC announced the public notice for the line auctions, as they are known, on Tuesday night. When carrying out them this Wednesday, he accepted two proposals, with a cut rate of 5.350000%. The liquidity placement will settle on the 21st and the currency buyback is scheduled for the 2nd of February 2023.
This Wednesday’s operation was similar to sale auctions combined with purchase auctions held on September 23 and 27.
Earlier, the municipality also sold US$3 billion in separate repurchase sale auctions, but this time for the purpose of rolling over the November 3, 2022 maturity, so there is no injection of new funds into the market.
Citi said in a report that the reason for holding Wednesday’s auctions appears to be the difficulty in financing in dollars amid demand for the spot US currency.
“The auctions should not impact the spot foreign exchange market, but should help short-term dollar financing to normalize,” the bank said. “If funding stress persists, more auctions are likely.”
The spot dollar rose 0.45% this morning, at 5.2786 reais on sale.
Source: CNN Brasil
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