Brazil Seventh Currency Swap Auction

Brazil has carried out its seventh currency swap contracts auction since November in a continuing bid to get rid of excess dollars in the market. The central bank sold 11,300 currency swap contracts, worth $541.2 million, maturing between 2006 and January 2008. Brazil has sold just over $3 billion of currency swap contracts since 18 November when it resumed selling the instruments after an eight-month break. Despite the announcement of the sale yesterday, Monday, the real continued to strengthen against the US dollar, driven by increased investment and trade flows.