MNI BRIEF: Brazil Says FX Action Only for Dysfunction -BCB Gov
The Brazilian Central Bank judges its criteria for intervention had not been met, despite the sharp depreciation of the real over the preceding week.
Central Bank of Brazil Governor Roberto Campos Neto said Wednesday the BCB will only intervene in foreign exchange markets when there is an "episode of liquidity or dysfunction" in the market.
"Intervention is a function of whether we think there is an episode of liquidity or dysfunction in the market, or sometimes there is a gap due to something that comes out that we believe was misinterpreted or misread. But we don't react to the fact that people are repricing our risk premium," he said in a meeting with XP investors in Washington.
MNI reported earlier Wednesday the BCB had judged its criteria for intervention had not been met, despite the sharp depreciation of the real over the preceding week. (See MNI POLICY: Brazil Central Bank Saw No FX Dysfunction Tuesday)