Brazil’s real climbed for a fourth day in the longest stretch of advances in a month as the central bank extended its intervention program supporting the currency.
The real rose 0.4 percent to 2.2374 per U.S. dollar at 9:53 a.m. in Sao Paulo, the strongest level on a closing basis since May 29. Swap rates on contracts maturing in January 2017 increased six basis points, or 0.06 percentage point, to 11.58 percent after falling last week to seven-month low.
The sale of foreign-exchange swaps to bolster the real and limit import price increases has helped the currency climb 5.4 percent this year, the biggest gain among 24 emerging-market countries tracked by Bloomberg. Central bank President Alexandre Tombini said May 22 that there has been “a certain drop in demand” for swaps, a comment that traders interpreted as a sign that he may cut back the program.
“The measure is positive for the currency and shows the central bank intends to keep supporting it,” Silvio Campos Neto, an economist at Tendencias Consultoria Integrada in Sao Paulo, said in a telephone interview. “Now the market is waiting for details regarding the continuation of the program.”