Itaú BBA - BRL reaches its strongest level in 2016

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BRL reaches its strongest level in 2016

May 2, 2016

The exchange rate closed the week at its strongest level in 2016

(full report attached)

The exchange rate closed the week at 3.44 reais per U.S. dollar

The BRL ended the week at its strongest level since August 2015. The Brazilian currency appreciated 3.8% during the week and outperformed its peers (Charts 1, 2, 3 and 4).

Central bank offered $32 billion in reverse swap contracts in April 

The monetary authority’s stock of swaps shrank to $69 billion last week from $102 billion in late March (Charts 5 and 6). The central bank also carried out a line auction last week of up to $2 billion and offered $1.6 billion in reverse swaps.

Currency inflows in April 

After two consecutive months of outflows, the currency flow became positive in April, driven by $464 million financial inflows and $4.4 billion trade inflows (Charts 7 e 8).

No external bond issuance by Brazilian companies last week

There were no issuances this year. Issuances added up to $8 billion in 2015 (Chart 9 and table).

Foreign flows to the stock market are positive

Foreign flows to the stock market were positive in April, as $832 million inflows to the spot market outsized $145 million outflows from the futures market (Chart 10).

Non-residents changed their positions in FX derivatives

Foreign investors reduced their positions in dollar futures by $4.5 billion, while increasing their positions in cupom cambial by $5.3 billion. Non-residents, banks and institutional investors hold positions of $22 billion, $48 billion and $19 billion, respectively (Charts 11, 12, 13 and 14).


 

 



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