20000101

Brazil real closes 0.2 pct firmer against dollar

SAO PAULO: The Brazilian real BRBY tacked on another 0.2 percent against the dollar on Thursday to cap a 6.5 percent recovery in the month of December and put the real at a much stronger point than forecast, traders said.

The real ends the year with a 33.1 percent loss against the dollar after the shock currency devaluation in January which led to a depreciation of more than 40 percent in the real in March.

The real closed Thursday at 1.806 compared with 1.810 on Wednesday. One month ago the real was at 1.924. It ended 1998 at 1.20.

Much of the recovery has come from central bank selling of dollars and dollar repurchase contracts.

Traders said central bank measures announced Wednesday to facilitate foreign capital entry also helped draw capital on Thursday.

A Reuters poll three months ago showed economists predicting the real would end at 1.90 reais to the dollar.

The foreign exchange market will open for two hours on Friday, but trading is expected to be scarce and will not affect the official exchange rate. The central bank said the real's weighted average rate for the dollar will be the same as on Thursday.-Reuters