(Bloomberg) -- Brazil’s central bank stepped into markets again to prop up the real amid a rout sparked by concerns about the sustainability of the country’s debt.
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The bank announced it will auction up to $3 billion on the spot market on Dec. 26. The real weakened 1.7% on Monday, leading losses among emerging-market currencies
The monetary authority has stepped in almost every day for the past week either with spot sales of credit-line auctions to try to meet a surge in demand for US dollars. They’ve spent about $17 billion in spot sales so far.
Investors are dumping Brazilian assets as doubts increase around President Luiz Inacio Lula da Silva’s ability to shore up public accounts. Congress watered down a proposal to cut 70 billion in public spending, which many analysts already viewed as significantly less effective than promised.
Companies with better-than-expected results are also driving up demand for greenbacks just as consumers also send dollars abroad even if in small quantities, central bank governor Roberto Campos Neto said during a presser last week. It’s an “atypical” movement, he added.
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