Brazil’s Reserves Break Record: US$ 210 Billion

Brazil's Central Bank Brazilian international reserves reached US$ 209.576 billion in liquidity this past Thursday, July 16. This was the highest ever level of foreign currency available in Brazil.

The figure was disclosed by the Central Bank of Brazil and surpasses the previous record, which was US$ 209.38 billion, attained on October 6th last year. Starting on that date, the Central Bank was forced to spend some of the reserves to contain the appreciation of the dollar, which became more intense with the worsening of the international financial crisis, starting in September 2008, and the withdrawal of foreign investment from the country.

As of early December, the dollar was equivalent to 2.53 Brazilian reais, but from then on, the value of the United States currency started to decline: it stabilized at 2.20 reais in the first quarter of the year; from April onwards, it decreased even further, at around 2.00 reais; and over the last 30 days it varied from 1.90 to 2.00.

Such stability in exchange rates led the monetary authority to resume its pre-crisis policy, of purchasing dollars whenever possible, to restore the reserves. Last May, the Central Bank reassumed its position as a buyer, taking advantage of the increased supply of dollars in the domestic market, prompted by the gradual re-establishing of foreign investment.

Expenditure by the Central Bank aimed at sustaining the value of the real against the dollar depleted the reserves down to US$ 199 billion, on February 19th this year, but with the improvement of the economic scenario, domestically and abroad, the monetary authority started purchasing again, having bought US$ 2.74 billion in May, US$ 3.24 billion in June, and another US$ 1.15 billion this month.

ABr

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