Brazil’s Foreign Reserves Rise from June to July

The Banco Central do Brasil increased foreign reserves in July from the previous month. Total foreign exchange reserves for Brazil amounted to US$ 376.2 billion an increase from US$ 373.9 billion in June.

Brazil has large foreign reserves to act as a cushion for certain economic scenarios. Emerging market economies with relatively large international reserves were better suited to handle the negative effects during the global financial crisis. The higher level of foreign reserves has enabled Brazil to intervene in the foreign exchange market to stabilize their currencies in times of need. In addition, the central bank was able to provide foreign exchange swap lines to local corporations during times of economic stress.

International Reserve Management
Banco Central do Brasil manages the international reserves. Most of the international reserves are in fixed income investments, most notably sovereign bonds, government agency bonds, supranational bonds, and fixed-term bank deposits.

December 2010 Asset Allocation of International Reserves

• 80.2% – Sovereign Bonds
• 10.2% – Central Bank and Supranational Deposits
• 5.9% – Government Agency Bonds
• 1.8% – Supranational Bonds
• 1.2% – Commercial Bank
• 0.7% – Other Assets including Gold

Brazil’s Official Reserve Assets in Billions (USD)

Note: Marked-to-market positions since November, 2000.
Source: Banco Central do Brasil

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