BRASILIA (Dow Jones)–Dollars flowed heavily into Brazil in January and in the first days of February, with incoming investment flows strongly outweighing foreign trade receipts.
According to figures released by the country’s central bank Wednesday, net dollar flows into the country rose to $7.28 billion in January from $1.94 billion in net dollar outflows seen in December. In the Feb. 1-3 period, dollar inflows totaled $3.79 billion. That compared with $322 million in net outflows seen in the same period last year.
Incoming investment to Brazil has surged early this year as several companies have taken advantage of favorable market conditions to launch overseas financing deals.
Net financial inflows to Brazil in January totaled $6.90 billion, while trade-related inflows reached only $381 million. Similarly, financial inflows in the first days of February totaled $3.66 billion, while trade related inflows reached only $134 million.
Brazil’s foreign trade results have suffered recently under the influence of an appreciated local currency, which has gained more than 8% against the dollar so far this year.
Brazil posted net dollar inflows of $65.27 billion in 2011. That result was up from only $24.40 billion in inflows seen in 2010.
Also Wednesday, Brazil’s central bank reported that local banks ended January with a net $5.25 billion long dollar position in futures markets. That was reversed from a net $1.58 billion short dollar position at the end of December.
-By Gerald Jeffris, Dow Jones Newswires; (5561) 9162-7863; [email protected]
(END) Dow Jones Newswires
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