FXstreet.com

Brazil's Foreign Currency Reserves Up $2.74 Billion In July

SAO PAULO (Dow Jones)--Brazilian foreign currency reserves grew $2.74 billion in July versus June, according to figures published on the central bank's Web site Monday.

Brazil's foreign reserves totaled $203.56 billion on July 31, up from $200.82 billion at the end of June.

In the first seven months of 2008, the country's foreign reserves increased by $23 billion. Reserves ended 2007 at $180.5 billion.

Reserves began to grow consistently after the central bank started holding daily auctions to purchase dollars from the spot market in October 2005. Reserves have jumped from $53.779 billion at the end of 2005.

In April 2006, the monetary authority assumed an even more aggressive posture in the foreign exchange market, holding a series of snap auctions to sell foreign exchange swap contracts, which allow investors to exchange dollar-indexed paper for bonds linked to domestic interest rates.

The mechanism typically helps to strengthen the U.S. dollar against the Brazilian real by reducing future dollar inflows.

-By Rogerio Jelmayer, Dow Jones Newswires; 5511-2847-4591; rogerio.jelmayer@dowjones.com

Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/al?rnd=gnR9y3EUeVwGMWuM34KHkA%3D%3D. You can use this link on the day this article is published and the following day.

(END) Dow Jones Newswires

August 04, 2008 08:02 ET (12:02 GMT)


Copyright 2008 Dow Jones & Company, Inc.