UPDATE 2-Brazil will not step up intervention to buoy currency -sources

viernes 13 de marzo de 2015 19:22 GYT
 

(Adds comments from other sources, context)

By Alonso Soto and Luciana Otoni

BRASILIA, March 13 (Reuters) - Brazilian authorities will not bow to market pressure to increase support for the real despite the currency's sharp sell-off on Friday, four government sources told Reuters.

The real weakened nearly 4 percent on Friday, hitting 3.28 per dollar, its weakest level since April 2003, due a surge of the dollar abroad and amid growing political uncertainty stemming from a corruption scandal at state-run oil company Petrobras.

Many investors expected President Dilma Rousseff to step up intervention beyond the central bank's daily sale of currency swaps - derivatives that provide investors with protection against currency losses.

But officials told Reuters Brazil will not use its international reserves to halt the real's depreciation, which could ultimately help its exports at a time when the economy is contracting.

"It would be useless to intervene," said an official who asked not to be named to speak freely. "This is a global trend. The dollar is stronger everywhere."

The real has weakened 13 percent in March, making it the worst performer among 152 currencies tracked by Reuters.

The decision not to step into the market signals a major policy shift for Rousseff, who during her first term in office increased intervention initially to weaken an overly appreciated real and later to halt it plunge.   Continuación...