20000129

Brazil's real loses early gains to close flat

SAO PAULO: The Brazilian real ended virtually unchanged on Thursday after some late dollar buying by banks erased the currency's small early gains against the greenback, traders said.

The real finished the day at 1.780 per dollar, a bit weaker than Wednesday's closing price of 1.779. During the day, it had firmed as much as 0.4 percent.

"At the end of trading, some banks had to buy dollars to balance their books," said one trader.

The real has been trading on the strong side of 1.80 per dollar since mid-January, thanks to surprisingly heavy foreign currency inflows.

Traders noted that Thursday's volume was thin, allowing a small amount of dollar buying to move the market.

Some of the dollar buying Thursday, they said, could be by banks that do not plan to participate in the auction Friday of 800 million reais of NBC-Es dollar-indexed securities offered by the Central Bank.

Traders said some banks are not interested in the alternative exchange hedge due to the longer, three-year maturity on the notes.-Reuters