Brazil sells $1.96 bln in repos to finance trade

Wed Dec 3, 2008 9:28am EST
SAO PAULO, Dec 3 (Reuters) - Brazil's central bank on Wednesday sold $1.958 billion of $2 billion on offer in a dollar repurchase agreement auction aimed at increasing trade finance lines that have been squeezed by the global credit crisis.
The bank sold the repos at 2.382 per dollar and will buy them back on Jan. 16, when participating banks will have to provide guarantees that they used the funds to extend trade financing to exporters.
Selling repos is one of several measures that Brazil's central bank has taken to add liquidity to the domestic financial system in recent months.
It has also sold dollars from its international reserves on the spot foreign exchange market as well as currency swaps.
(Reporting by Jenifer Correa, Writing by Todd Benson, Editing by Chizu Nomiyama)