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Brazilian real closes strongest against dollar in 9 years

Brazilian real closes strongest against dollar in 9 years

The Brazilian real closed at its highest level against the dollar in nine years on Tuesday, trading at 1.68 to the U.S. currency.
It was the strongest close for the real since May 1999, when Brazil's government first floated the real against other currencies.
Traders said the real has been bolstered by a heavy inflow of dollars. Foreign investors are betting on gains for Brazilian stocks, and investors are attracted by the high return offered by Brazilian lending rates.
In January, Brazil's central bank left the country's benchmark interest rate unchanged at a lofty 11.25 percent. The rate hasn't changed since Sept. 5, as the bank worried about containing domestic inflation.
On Tuesday, the bank bought U.S. dollars at a snap auction to stem the dollar's decline.
Brazil has a glut of dollars, with a trade surplus of US$40 billion (euro26.9 billion) last year fueled by a boom in demand for key exports such as beef, iron ore and soy. Coupled with rising foreign investment, net currency inflows reached a record US$87.5 billion (euro58.8 billion) in 2007.
The weaker dollar was also reflected in Colombia, where the peso rose to 1,869.85 to the dollar _ an eight-year high.
Analysts predicted the peso would strengthen further, as Colombians living abroad send more money home, and foreign direct investment could surpass last year's record of US$6.77 billion (euro4.55 billion).
"Colombians living abroad are expected to send more remittances this year as the peso appreciation is reducing the amount of money Colombians are receiving," said Edgar Jimenez, an analyst at the local unit of Stanford Group.


Updated : 2021-06-13 20:30 GMT+08:00