Brazil’s Real Falls as Companies Seek Dollars to Repay Debt

By Francisco Marcelino

Dec. 15 (Bloomberg) -- Brazil’s real fell for a second day against the dollar as companies sought to buy dollars in the domestic market to pay external debt.

The currency declined 0.6 percent to 2.4075 per dollar at 7:57 a.m. New York time, from 2.3941 on Dec. 12.

Brazil’s central bank said on Dec. 11 it plans to lend companies as much as $10 billion from the nation’s international reserves as they struggle to repay their dollar debt.

“There are about $7 billion leaving the country by year end as companies must pay bonds and loans and there aren’t enough dollars in the market,” said Reginaldo Galhardo a currency- trading manager at Treviso Corretora de Cambio in Sao Paulo. “The currency market will be under pressure until the central bank starts to lend international reserves.”

The yield on Brazil’s overnight futures contract for January 2010 slipped four basis points, or 0.04 percentage point, to 12.77 percent.

To contact the reporter on this story: Francisco Marcelino in Sao Paulo at mdeoliveira@bloomberg.net.