June 24, 2020 / 1:09 PM / 13 days ago

UPDATE 1-Brazil posts current account surplus for 3rd month in a row

(Adds detail)

By Jamie McGeever

BRASILIA, June 24 (Reuters) - Brazil posted a current account surplus for the third month in a row in May, the central bank said on Wednesday, while foreign direct investment rebounded slightly and the outflow from stocks and bonds slowed further from the record sell-off in March.

This is the first time since 2007 that Brazil’s current account has registered three consecutive monthly surpluses, according to Refinitiv data, which analysts say should provide some support to the currency, the real.

Brazil’s $1.3 billion surplus was mainly due to a fall in the investment income and services deficits to $2.1 billion and $1.5 billion, respectively, the central bank said.

That was less than the $1.9 billion surplus forecast in a Reuters poll of economists, but helped narrow the deficit for the first five months of the year to $11.3 billion from $18.3 billion in the same period a year ago, the central bank said.

In the 12 months to May, Brazil’s current account deficit as a share of gross domestic product narrowed slightly to 2.5% from 2.6%, the narrowest since September.

The central bank said it expects a current account surplus of $2 billion in June.

In the capital account, foreign direct investment (FDI) totaled $2.55 billion in May, more than the $1.65 billion expected in a Reuters poll and rebounding from the historically low $234 million recorded in April.

The central bank said it expects $3.5 billion FDI inflows in June.

Investors pulled $2.2 billion out of domestic markets, the central bank said, comprised of $545 million in debt securities and $1.6 billion in stocks.

In the first five months of the year net portfolio outflows totaled $33.6 billion, compared with a $9.7 billion inflow a year earlier. In the 12 months to May, portfolio outflows totaled $51 billion, the central bank said. (Reporting by Jamie McGeever; Editing by Andrew Heavens and Jonathan Oatis)

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