Brazil central bank to offer $2 bln in dollar repos

Tue Dec 2, 2008 9:17am EST
SAO PAULO, Dec 2 (Reuters) - Brazil's central bank said on Tuesday it will offer $2 billion in dollar repurchase agreements in an auction on Wednesday aimed at increasing trade finance for exporters hit by the global credit crunch.
Banks that buy the repos will be required to provide proof that they used the funds to provide financing for exporters, who have been hit by a sharp reduction in credit lines.
The central bank has sold dollar repos, currency swap contracts and dollars from its international reserves on the spot currency market in recent months to add liquidity to the financial system.
Brazil's currency, the real BRBY, was trading 2.5 percent weaker at 2.377 per dollar after the announcement. (Reporting by Jenifer Correa; Writing by Todd Benson; Editing by James Dalgleish)