Itaú BBA - Currency outflows for the second month in a row

FX and Capital Markets

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Currency outflows for the second month in a row

April 11, 2016

After ending last year and January 2016 in positive territory, the currency flow was negative in February and March.

(full report attached)

BRL weakened last week

The exchange rate closed the week at 3.59 reais per U.S. dollar, depreciating 1.0%, performance in line with its peers (Charts 1, 2, 3 and 4).

Central bank maintains reverse swap auctions and rollover of traditional swap contracts

The monetary authority continued to roll over contracts due in May at a pace of 5,500 contracts per day. If this pace is sustained until the end of the month, 50% of contracts will be rolled over and $5.2 billion will expire. The central bank also carried out four reverse swap auctions, totaling $1.3 billion (Charts 5 and 6).

FX currency outflows in March

After ending last year and January 2016 in positive territory, the currency flow was negative in February and March. There were $4.3 billion financial outflows and $1.7 billion trade inflows last month, so the balance was negative by $2.5 billion (Charts 7 and 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 remain positive in April, with US$ 26 million inflows to the futures market and $18 million inflows to the spot market (Chart 10).

Investors changed positions in FX derivatives


 

Foreign investors increased their positions in dollar futures by $5.9 billion, while reducing positions in cupom cambial by $4.2 billion. Institutional investors decreased their positions in dollar futures by $2.9 billion and in cupom cambial by $2.7 billion. Non-residents, banks and institutional investors hold positions of $25 billion, $52 billion and $22 billion, respectively (Charts 11, 12, 13 and 14).


 



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