In a brief statement, the central bank confirmed that the daily auctions will continue until the full amount of the maturing contracts is renewed, aiming to ensure sufficient foreign exchange liquidity and maintain orderly market conditions.
Traditional currency swaps are a key tool in Brazil's monetary policy toolkit. Under these instruments, the central bank pays the buyer the variation in the U.S. dollar plus an agreed interest rate, while receiving the variation in Brazil's Selic interest rate in return. This mechanism helps hedge currency risk for market participants and manage volatility in the foreign exchange market.
The upcoming rollover is part of the central bank's routine liquidity management strategy and reflects a proactive stance in providing currency hedging to investors as the expiration date of the contracts approaches.
Market analysts note that the move comes amid heightened global economic uncertainty and potential volatility in emerging markets, as investors react to shifting interest rate expectations in the U.S. and other major economies.
By signaling its intent to fully renew the maturing contracts, Brazil's central bank is likely aiming to reassure markets and stabilize the real, especially at a time when global investors are watching Latin American currencies closely.
Further updates on the auction outcomes are expected to be released by the central bank as the operations proceed.