Brazil’s real swung between gains and losses, with a measure of volatility surging to the highest in four years, as the central bank stepped up support for the currency following a rout that sent it to a record low last week.
The real fell 0.3 percent to 4.121 per dollar at 10:36 a.m. in Sao Paulo after earlier gaining as much as 0.8 percent. The central bank sold 20,000 foreign-exchange swap contracts worth $987.6 million Tuesday and will offer $2 billion in credit lines to support the real. Officials resumed new sales of the instruments Sept. 23 after ending a similar program in March.
The real has tumbled 8.3 percent since Standard & Poor’s cut the nation to junk Sept. 9 and reached its lowest since it was created in 1994 as concern mounts that the country may face further downgrades amid a political stalemate and a corruption investigation at the state-controlled oil company. President Dilma Rousseff’s proposals for spending cuts and tax increases are failing to win support, with lawmakers saying they’ll burden middle-class Brazilians already suffering from a recession and inflation that’s more than double the mid-point of the central bank’s target.
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