Brazil's central bank need to intervene to stabilize exchange rate: finance minister
Dec 21, 2024
Brasília (Brazil), December 21: Brazil's Central Bank must intervene to stabilize the exchange rate against the U.S. dollar amid recent disruptions in its financial market, said Finance Minister Fernando Haddad on Friday.
At a breakfast meeting with journalists, Haddad acknowledged "communication problems" in the government's presentation of a spending cut package to Congress, which led to market volatility.
"There was a communication problem at the end of the year that led to the appreciation of the dollar in Brazil," Haddad said, stressing the need "to correct communication, take measures, and ensure that this brings the exchange rate not to a specific level, but to a functional situation."
The Central Bank's role, he said, is to address market dysfunctions caused by uncertainty or insecurity and interventions align with Brazil's floating exchange rate regime.
On Thursday, the dollar hit a record high of 6.30 reals, up from 4.85 reals in January, marking the real the most depreciated currency of 2024.
In response, Brazil's Central Bank intervened aggressively, injecting 8 billion dollars into the foreign exchange market on Thursday and an additional 5 billion dollars on Friday through spot and online auctions. This brought the total value of its interventions in December alone to 25.76 billion dollars, the highest monthly amount since the inflation-targeting regime was adopted in 1999.
Source: Xinhua News Agency
