Itaú BBA - Foreign currency inflows in November

FX and Capital Markets

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Foreign currency inflows in November

December 7, 2015

In November, there were $4.1 billion in currency inflows

(full report attached)

Brazilian real strengthened and closed at 3.75 reais per U.S. dollar

In another week of domestic uncertainties, the exchange rate closed the week at 3.75, appreciating 2.5% and outperforming its peers (Charts 1, 2, 3 and 4).

Central bank begins the rollover of FX swap contracts expiring in January

The monetary authority started the rollover of contracts due in January at a pace of 11,260 contracts per day. If this pace is sustained, contracts will be fully rolled over for a fifth consecutive month. The central bank also carried out three line auctions — one of up to $2.75 billion and two of up to $500 million (Charts 5 and 6).

Currency inflows in November

The currency flow was positive last week, with $791 million trade inflows and $675 million financial inflows. In November, there were $4.1 billion in currency inflows (Charts 7 and 8).

No external bond issuance last week

No bonds were issued by Brazilian companies overseas. Year-to-date, issuances add up to $8 billion (Chart 9 and table).

Foreign flows to the stock market are slightly negative

Foreign flows to the stock market are negative by $77 million, as $129 million outflows from the spot market outsized $52 million inflows to the futures market (Chart 10).

Investors reduced their long positions in dollar futures

Institutional and foreign investors reduced their long positions in dollar futures by $2.8 billion and $1.9 billion, respectively. Non-residents also reduced their short positions in FX swaps. Non-residents, banks and institutional investors hold positions in FX derivatives of $28 billion, $51 billion and $27 billion, respectively (Charts 11, 12, 13 and 14).


 



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