Brazil’s central bank is the latest to wade back into the markets, announcing a dollar-buying auction today. Friday was their first day in the market to buy dollars in nearly eight months, Reuters reports, after being forced to defend the Real and sell dollars in recent months as the financial crisis deepened.
Now that flows are back inbound into Brazil, the central bank is replenishing lost reserves. Those reserves will ultimately flow back into the US bond market, so perhaps the back up in yields in recent weeks is proving enticing as well, as central banks get more bang for their buck.
