Itaú BBA - BRL near 4.00 in the end of 2015

FX and Capital Markets

< Back

BRL near 4.00 in the end of 2015

January 4, 2016

The dollar strengthened almost 50% against the real in 2015

(full report attached)

Exchange rate closed the year at 3.96 reais per U.S. dollar

During the last week of the year, the BRL depreciated against the U.S. dollar and ended 2015 at 3.96 reais per dollar, close to our 4.00 forecast. The exchange rate weakened 0.4% during the week, in line with its peers. The dollar strengthened almost 50% against the real in 2015 (Charts 1, 2, 3 and 4).

Central bank announced the rollover of FX swap contracts due in February

The monetary authority completed the rollover of contracts due in January and announced the rollover of contracts expiring in February at a pace of 11,600 contracts per day. If this pace is sustained, contracts will be fully rolled over for the sixth consecutive month. The central bank also carried out a FX credit line auction of up to $1.4 billion (Charts 5 and 6).

Currency flow remained positive in December

The currency flow remained positive in December, by $810 million. During the last week, there were $3.1 billion trade inflows and $2.7 billion financial outflows (Charts 7 and 8).

No external bond issuance last week

No bonds were issued by Brazilian companies overseas. In 2015, issuances added up to $8 billion (Chart 9 and table).

Foreign flows to the stock market were negative during the month

Foreign flows to the stock market were negative by $1.1 billion, dragged by $143 million outflows from the futures market and $933 million outflows from the spot market (Chart 10).

Institutional investors increased their positions in dollar futures

Institutional investors increased their long positions in dollar futures by $1.5 billion. Meanwhile, non-residents reduced their long positions in dollar futures by $644 million, but increased their positions in cupom cambial instruments by $472 million. Other positions in FX derivatives were virtually unchanged. Non-residents, banks and institutional investors hold positions of $29 billion, $41 billion and $33 billion, respectively (Charts 11, 12, 13 and 14).


 



< Back