Investing.com -- The central bank of Brazil has initiated spot dollar auctions in an effort to strengthen the local currency, the real, which recently recorded an all-time low amid a financial market crisis. The monetary authority sold $3 billion early Thursday, following an announcement made late Wednesday. Despite this move, the real saw little improvement, prompting a second auction announcement, with a potential sale of up to $5 billion.
Following the announcement of the second intervention, the Brazilian real BRBY experienced a slight strengthening, up by 0.3%, after an earlier decline in the day. The currency of Latin America's largest economy had hit its lowest point on Wednesday, a day that also saw local stocks take a hit as markets faced turbulence due to a large budget deficit and uncertain government spending plans.
Additionally, the cost to insure Brazil's debt against default has risen to its highest level since May 2023. This move indicates growing concern about the country's ability to meet its debt obligations amidst the ongoing financial crisis.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.