Brazil Central Bank Intervenes to Ease Rally

The central bank of Brazil bought dollars in the forex spot market today in order to hold down the soaring value of the real, the Brazilian currency. So far this year, the real has appreciated by 8.5 percent, placing pressure on exporters.

Economists attribute the rise of the Brazilian real to the inflow of capital. Oversees debt markets were tapped by Brazilian companies to the tune of 14 Billion USD this year. Other thriving South American economies, such as Colombia, have similarly appreciating currencies and face the same choices as Brazil regarding intervening in the currency markets.

Source: Bloomberg

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Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.