March 15, 2017 / 9:46 PM / a year ago

Brazil to resume FX swap rollover with $500 mln auction

SAO PAULO, March 15 (Reuters) - The Brazilian central bank will sell as much as $500 million worth of currency swaps on Thursday, resuming foreign exchange intervention following a three-week pause.

The central bank will offer as many as 10,000 traditional currency swap contracts, which correspond to dollar sales to investors for future delivery, to roll over April maturities.

It currently holds roughly $22 billion worth of swaps on its balance sheet, $9.7 billion of which expires in the first day of next month. Should it maintain that pace of daily swap sales until the penultimate session of March, as it has done in previous months, it will allow around $4.2 billion worth of currency swaps to expire.

The Brazilian real closed nearly 2 percent stronger on Wednesday after the U.S. Federal Reserve refrained from flagging any plans to accelerate interest rate hikes, allaying fears that higher U.S. rates could drain capital away from emerging markets. (Reporting by Bruno Federowski; Editing by Daniel Flynn)

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