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Brazil real closes firmer on steady dollar inflow

SAO PAULO: The Brazilian real BRBY closed 0.5 percent firmer on Tuesday as dollars continued to flow into the country, traders said.

The real finished Tuesday at 1.769 to the dollar, compared to 1.778 at Monday's close, for an accumulated gain in February of 1 percent.

"Apart from the relatively low level of foreign payments for next month, there are continued expectations of net currency inflows," said one trader at a foreign bank.

He said the market is optimistic about Brazil's debt issues in foreign capital markets and a steady flow of foreign direct investment into Brazil.

Early in the day, the real got a boost to 1.769 as ratings agency Standard & Poor's raised its outlook on the credit-worthiness of the country's foreign debt, indicating a rating upgrade is on its way.

An auction of dollar-linked domestic treasury notes (NBC-Es) also helped sustain the real on Tuesday, traders said, as investors bought the alternative dollar hedge.

The Central Bank sold its whole lot of 900 million reais in three-year NBC-Es at a yield of 11.80 percent, down from 12.50 percent at the last similar NBC-E auction on Feb. 16. -Reuters