Bloomberg News

Brazilian Real Touches Level Stronger Than 2 Per Dollar on IPOs

April 26, 2013

Brazil’s real touched a level stronger than 2 per dollar for the first time this week as initial public offerings attracted global investors to Latin America’s biggest economy.

The currency rose less than 0.1 percent to 2.0004 per U.S. dollar at 10:57 a.m. in Sao Paulo after touching 1.9981, the strongest intraday level since April 17. The last time the currency closed at a level stronger than 2 per dollar was on April 16. The real was headed for a 0.6 percent weekly rally.

“We have capital inflows from the IPOs,” Ures Folchini, the head of fixed income at Banco WestLB do Brasil SA in Sao Paulo, said in a telephone interview. “The tendency is for the real to remain near 2 per dollar.”

Swap rates climbed a day after Carlos Hamilton, the central bank’s director for economic policy, said the monetary authority may have to step up the pace of increases in borrowing costs to curb inflation.

BB Seguridade Participacoes SA, the insurance unit of Banco do Brasil SA, is raising 8.5 billion reais ($4.2 billion) in the world’s biggest initial public offering this year.

Swap rates due in January 2015 climbed two basis points, or 0.02 percentage point, to 8.38 percent. They have risen three basis points this week.

To contact the reporters on this story: Blake Schmidt in Sao Paulo at bschmidt16@bloomberg.net; Josue Leonel in Sao Paulo at jleonel@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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