May 18, 2018 / 10:41 PM / in a year

UPDATE 1-Brazil to boost currency swap program to fight volatility

(Adds comments from finance minister, context)

BRASILIA, May 18 (Reuters) - Brazil’s Central Bank will boost its currency swap program to reduce local currency volatility, Finance Minister Eduardo Guardia told Reuters on Friday.

The minister spoke a few moments after the Central Bank announced that it would on Monday offer 15,000 currency swap contracts, which are equivalent to operations to sell dollars in futures markets, instead of the 5,000 contracts that were offered daily this week.

The Brazilian real fell more than 1 percent against the dollar to the lowest level in more than two years on Friday, at around 3.74 to the greenback.

Guardia said, however, that there were no plans to change the government’s policies regarding debt. He said the Treasury will continue operating normally despite the currency volatility.

“This is part of the market’s day-to-day. We are going to continue with our path, with our reform agenda,” he said.

“The country has a very favorable situation regarding current account, with high foreign currency reserves, low deficit on current transactions, which has been financed by foreign direct investment. All that differentiates Brazil from other economies,” Guardia said. (Reporting by Marcela Ayres; Editing by Cynthia Osterman)

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