Brazil Eases Reserve Requirement on Banks to Buoy Currency

“Brazil’s central bank reduced reserve requirements on short dollar positions held by local banks as it steps up efforts to buoy the real, the worst performing major currency this year.

Starting Dec. 20, banks will be required to deposit in cash at the central bank 60 percent of their short positions in U.S. dollars above $3 billion, up from a previous limit of no more than $1 billion or any amount in excess of its capital base, the central bank said in a statement.

The real was unchanged at 2.0986 per U.S. dollar at 9:42 a.m. local time.

The government started this month loosening capital controls it imposed in the past two years after the real tumbled to a three-year low on Nov. 30 and the economy grew at half the pace forecast by economists in the third quarter….”

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