Brazil’s real led losses among its most-traded peers as the central bank intervened to weaken the currency in a bid to slow this year’s rally and support exporters.
The real dropped 1.6 percent to 3.4936 per dollar at 4:43 p.m. in Sao Paulo, making it the world’s worst-performing currency after Libya’s dinar. The loss came after the monetary authority sold 40,000 reverse swaps Monday, a move that’s equivalent to buying $2 billion in the futures market.
Brazil’s real is still up 14 percent this year, heading for its best annual gain since 2009, on speculation that a new government will be able to restore growth and curb a record budget deficit. Beginning in March, policy makers started selling reverse swaps in a bid to keep it from appreciating so much that it impairs the competitiveness of Brazil’s exports.