SAO PAULO–Brazil’s central bank on Monday said it will step up its daily intervention in the foreign exchange market as the currency continues to weaken sharply versus the dollar because of political uncertainty.
The monetary authority said it will increase the pace of rollovers of dollar swaps on Monday, offering to roll over up to 14,000 swap contracts at auction, compared with 9,000 contacts offered in previous sessions.
That means the central bank will offer to roll over up to $700 million in swap contracts, compared with $450 million previously.
The swap auction is the equivalent of the sale of dollars in the futures markets.
The real has weakened sharply since President Dilma Rousseff won reelection in late October, on concerns about the direction of economic policy.
Added to that is a growing corruption scandal at the country’s giant oil company, Petroleo Brasileiro SA, or Petrobras. On Friday, the firm delayed its third-quarter results due to the deepening problems.
Last week, the real approached nine-year lows versus the dollar. The real ended Friday at BRL2.5981 to the dollar, according to Tullett Prebon via FactSet, compared with BRL2.5950 at Thursday’s close.