On Tuesday, April 28th, the Central Bank of Brazil informed that it is planning to offer unspecified sum of the American dollar for repurchase of agreements during an auction on Wednesday, April 29th. As reported by the CB of Brazil, this will be in part as a continuous effort done by the Central Bank, performed in order to add more liquidity to the local financial system.
The Central Bank of Brazil indicated that in the nearest future it is planning to offer repos that will have separate three maturities, and the auctions will happen on June 1st, July 1st and August 3rd.
But it is not only the repos, which according to the nearest future plan of the Central Bank of Brazil, are going to become a tool for restoration and improvement of the country’s financial system, and its liquidity in Brazil and around the world.
The Brazil’s Central Bank is using other tools as well. For example, during the past few months the Bank has been periodically trading foreign currency swaps as well as dollars taken from the country’s international reserves. This proved to be very helpful in the process of easing the liquidity crunch of the country in the foreign currency exchange market.