Brazil's currency firmed on Monday even though the central bank said it would limit the ability of banks to place bets in the foreign exchange market, while stocks rose modestly. The real oscillated around the unchanged mark after opening weaker and later gained 0.20 percent to 1.956 per US dollar.
The real has been trading stronger than 2.0 per dollar since May 15, when it pierced that level for the first time in six years. Banks will have to cut their exposure to the foreign exchange market to 30 percent of their assets, down from 60 percent, the central bank said as it works to curb gains in the real.
Also, starting July 2, banks must have enough cash in a standby account to cover all of their exposure to the foreign exchange market. Right now, they only need enough cash to cover half of their exposure. Analysts said on Monday the measures could help limit the trading that has fed the trend of an appreciating real.
But traders said the measures might not have much impact as many banks cut positions last week on rising international risks. The real weakened sharply last week and some traders said investors could once again find it attractive during Monday's session.
"At first there was a bit of a correction because it's not clear how much an impact this could have ... but then buyers of reais quickly returned," said Francisco Carvalho, head of currencies at the Liquidez brokerage.