Brazil’s central bank has spent $17 billion from its reserves to prop up the struggling real currency, which had been experiencing weekly losses. The measures came as a response to the market’s concerns about the country’s economic situation. President Luiz Inacio Lula da Silva’s comments on social media also contributed to the currency’s recovery, as investors took heart that the government is committed to protecting the nation’s fiscal rule.
The central bank’s actions included a spot sale and credit line auction totaling $7 billion, which helped to stabilize the market. The real was among the top performers in emerging markets, reaching its highest level of the session after Lula’s comments. This intervention aims to cushion the impact of economic challenges and reassure investors about Brazil’s fiscal management.
Source: https://www.bloomberg.com/news/articles/2024-12-20/central-bank-burns-17-billion-in-reserves-to-lift-brazil-s-real