Brazil’s central bank said on Tuesday it would hold auctions starting on June 2 to roll over traditional currency swaps due July 1, when $24.98 billion are set to expire.
In a statement, the central bank said it would use a new platform for the auctions, adding that proposals – as well as the accepted bids – should now be done in multiples of 100 contracts.
“Therefore, it will not be possible to carry out the exact rollover of the maturing stock,” the bank said.
The move contrasts with the monetary authority’s previous announcements of deals to rollover traditional foreign exchange swaps, as the bank used to voice its intention to rollover all contracts.
The central bank usually seeks to provide currency hedging and maintain liquidity conditions for the market with its rolling policy.
In a traditional currency swap, the bond pays the buyer the currency variation plus an interest rate. In return, the central bank receives the variation in the Brazilian benchmark interest rate, the Selic.
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