Itaú BBA - Foreign currency inflows in April

FX and Capital Markets

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Foreign currency inflows in April

April 25, 2016

After two consecutive months of outflows, the currency flow became positive in April.

(full report attached)

BRL underperformed last week

The Brazilian currency closed the week at 3.53 reais per U.S. dollar, depreciating 1.7% and underperforming its peers (Charts 1, 2, 3 and 4).

Central bank already sold $30.1 billion in reverse FX swap contracts in April

The outstanding amount of FX swaps shrank to $71 billion last week from $102 billion in late March (Charts 5 and 6).

Currency flow is positive in April

After two consecutive months of outflows, the currency flow became positive in April. Month-to-date, there were $1.3 billion financial inflows and $2.6 billion trade inflows, totaling $3.9 billion (Charts 7 and 8).

No external bond issuance by Brazilian companies last week

There were no corporate 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 are positive in April, as $433 million inflows to the spot market outsized $317 million outflows from the futures market (Chart 10).

Investors changed their positions in FX derivatives

Non-residents reduced their positions in dollar futures by $3.1 billion. Institutional investors increased their positions in dollar futures by $3 billion, while cutting their positions in FX swaps by $1.8 billion. Non-residents, banks and institutional investors hold positions of $21 billion, $50 billion and $20 billion, respectively (Charts 11, 12, 13 and 14).


 

 



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