Itaú BBA - Foreign currency outflows in June

FX and Capital Markets

< Back

Foreign currency outflows in June

June 29, 2015

After three weeks of appreciation, the real depreciated last week.

(full report attached)

After three weeks of appreciation, the real depreciated last week.

The real depreciated over the past week, with the weakest fiscal results and the increase in the unemployment rate in May. On the international scenario, uncertainties about a possible agreement in Greece pressured the currency. The exchange rate closed the week at 3.13 reais per dollar, a depreciation of 1%, in line with peer currencies’ performance (Charts 1, 2, 3 and 4).

BCB continued to roll over July contracts.

The Brazilian Central Bank (BCB) continued the rollover of US$ 8.7 billion in swaps maturing in July at a pace of 5,200 contracts/day. If the same pace is maintained until the end of the month, the monetary authority will roll over 70% of the total batch and will decrease its short position in FX swaps by US$ 2.6 billion (Charts 5 and 6).

Currency flow remains negative in June.

The currency flow was negative at US$ 2.3 billion in the week, with financial outflows of US$ 2.8 billion and commercial inflows of US$ 535 million. Month-to-date, the currency flow in June is negative at US$ 2.9 billion (Charts 7 and 8).

No new bond issue abroad last week.

Unlike the previous week, there was no new bond issue by Brazilian companies in foreign markets. Month-to-date, issues in June totaled US$ 5 billion (Chart 9 and table).

Foreign flows to the stock market are positive in June.

Foreign flows into the stock market are positive at US$ 720 million, with inflows into the spot market and outflows from the futures market (Chart 10).

Institutional investors reduced their long positions in FX derivatives.

Institutional investors reduced their long positions in FX derivatives (especially dollar futures) to US$ 25.9 billion. Banks and non-residents, on the other hand, increased their long positions to US$ 43 billion and US$ 36.8 billion, respectively (Charts 11, 12, 13 and 14).



< Back