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Brazil real ends a tad lower at 1.745/dlr

SAO PAULO: The Brazilian real erased early gains and closed slightly lower on Wednesday at 1.745 per dollar after Tuesday's 1.743, depressed by insignificant day-end dollar purchases, traders said.

"A lack of liquidity combined with some dollar purchases at the end of the day were enough to push the dollar up slightly," said a trader with a big local bank. Traders said it was difficult to estimate the day's dollar flow.

The real started Wednesday noticeably firmer, as high as 1.738 per dollar, as the market applauded Brazil's first benchmark interest rate cut in six months after OPEC decided to boost oil output.

Late on Tuesday, the Central Bank cut its key interest rate, the Selic, to 18.5 percent from 19.0 percent after an agreement of OPEC oil producers to hike output, thereby reducing the cost of oil for Brazil. Imported crude accounts for around 35 percent of the country's oil consumption.

Analysts have said the market still remains generally optimistic about the economic setting and the real has some room to firm in the coming days. However, in April it may come under pressure from maturing debts of Brazilian companies. -Reuters