Real climbs as central bank wraps up rate cut cycle

Posted On: November 29, 2012
The value of the Brazilian real edged higher on Thursday against the U.S. dollar, prompted by the central bank finishing a 15-month span of ongoing interest rate cuts, according to The Wall Street Journal.

The central bank of Latin America's biggest economy opted on Wednesday to preserve its benchmark rate at the low level of 7.25 percent, which represents a historic low. Month-end differences between long- and short-end position holders also prompted a good deal of market volatility.

"If the rate goes beyond BRL2.10, the central bank will likely intervene to curtail the real's slide," currency director Mauro Araujo told the news source on Thursday regarding the range of the real he predicts within the next few trading sessions.

Reuters reports the South American nation intends to distribute international debt in U.S. dollars this year, according to the treasury secretary.

Arno Augustin also told a press conference on Thursday that the real presently is situated at a value that the institution he and his peers consider to be a boon for the rapidly developing economy.

Category: Industry News


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