The Central Bank of Brazil will conduct up to $2 billion in simultaneous U.S. dollar auctions on Monday, pairing the sales with repurchase agreements maturing in April and May. The operation is designed to roll over contracts expiring in January while maintaining liquidity in the foreign exchange market. Policymakers aim to ease pressure on the Brazilian real without triggering volatility in spot markets.
The move follows growing currency stress across emerging markets, driven by rising global dollar demand and tighter financial conditions. By using repos rather than outright dollar sales, the central bank intends to preserve reserves and provide predictable funding channels for domestic banks and corporates.
Economists say the strategy signals caution and a preference for targeted liquidity tools over direct market intervention. The auctions give market participants greater certainty around short-term dollar availability, helping to stabilize the currency as external pressures persist.
