UPDATE 2-Brazil to offer dollar repos targeted at exporters

Tue Nov 4, 2008 6:06pm EST
(Adds value of offer)
BRASILIA, Nov 4 (Reuters) - Brazil's central bank said on Tuesday it will offer $2 billion in dollar repurchase agreements targeted at exporters, its latest effort to ease a liquidity crunch in the foreign exchange market.
The repurchase agreements, or repos, will be offered in an auction on Wednesday, and banks purchasing the contracts must use the funds for trade financing, the central bank said. Banks, in turn, can use their loan agreements with exporters as collateral for the currency acquired in the auction.
"The operation is very important because it aims to normalize export financing," Henrique Meirelles, Brazil's central bank president, told a news conference in Brasilia.
During a previous, similar auction, the central bank required banks to put up sovereign bonds as collateral.
The central bank in recent weeks has also sold dollars in the spot market and eased banks' reserve requirements to ease the credit crunch.
"If necessary, the central bank will continue to provide liquidity to the dollar interbank market," said Mario Toros, head of monetary policy at the central bank.
Toros said the central bank would tap its international reserves for these operations. (Reporting by Isabel Versiani, Writing by Ana Nicolaci da Costa and Inae Riveras; Editing by Diane Craft)