BC Announces $ 1 billion cash auction and reverse swap auction of $ 1 billion, both for Wednesday (25)

The Central Bank (BC) announced on the night of Monday (23), through two announcements, the holding next Wednesday (25) of two auctions simultaneous, from 9:30 to 9:35, in the exchange – One of sale in sight of dollars and another from currency swap reverse.

According to the BC, in the cash auction will be offered $ 1.0 billion. In this sale, in practice the BC removes dollars from international reserves and sells to dealerscholarship.

In the reverse exchange rate swap operation the BC will negotiate up to 20,000 contracts, which also equals $ 1 billion. The practical effect of this operation, however, is equivalent to a purchase of dollars in the future market.

In practice, the BC intends, on Wednesday (25), to act at both ends: sell $ 1 billion in the market in cash and buy $ 1 billion in the future market. In theory, if both auctions move $ 1 billion, they would not have a high or low influence on the dollar quotes in sight on Wednesday.

According to the statement, in the reverse swap operation the start date of the contract will be June 26 (Thursday, the day after the auction), while the due date will be August 1 this year.

AUGUST ROLL

In a statement, the BC also announced that it will start, on July 1, to the auctions for the rolling of traditional currency swaps that expire on August 1.

However, contrary to what it was doing in recent months, this time the BC has not indicated in the note the intention to make the full roll of the August salaries. The institution also did not report, in the note, the total swap stock that are scheduled to win in August.

The effective stock to be rolled over the days will also depend on the reverse exchange swap operation next Wednesday (25): each reverse swap contract placed by the BC will represent the elimination of a traditional exchange swap contract to win in August. Thus, rolling may be smaller.