Brazil’s central bank props up world’s worst currency

Bloomberg

Brazil’s central bank announced it will sell dollars in the spot market for the first time this year, boosting its efforts to support the currency after a dire week.
Policy makers will offer as much as $1 billion in a spot dollar auction. The central bank had been stepping into the foreign exchange markets only via swap auctions, of which it sold $9.5 billion in the past month in a bid to contain the volatility.
The real dropped 3.4% in the past week, extending the year-to-date drop to 13%, a standout even in the global sell-off sparked by coronavirus concerns. Disappointing economic figures and declining forecasts for growth this year are also weighing on Brazilian assets — especially the real, which is often used as hedge for long positions in stocks and rates.
The central bank signaled it will likely cut borrowing costs in its March 18 meeting, resuming the easing cycle markets had thought was over. The statement put extra pressure on the currency and led traders to fully price in a quarter-point rate cut.