Brazil's central bank sets more currency intervention with Monday auction

SAO PAULO/BRASILIA, Dec 13 (Reuters) -

Brazil's central bank on Friday announced it would start next week with another currency auction, after foreign-exchange interventions over the past several days failed to reverse the Brazilian real's weakening and the currency closed down against the U.S. dollar.

The central bank will hold a dollar-denominated auction with a repurchase agreement for up to $3 billion starting at 10:20 a.m. local time on Monday, it said in a statement.

The South American nation's currency has recently reached record lows, driven by market concerns over its fiscal outlook after President Luiz Inacio Lula da Silva's administration unveiled a spending control package that fell short of expectations for stronger measures to address rising public debt.

The central bank sold $845 million in a surprise spot dollar auction on Friday afternoon, which trimmed the real's losses, but not enough to reverse its depreciation.

The currency ended the session around 0.3% weaker at about 6.03 per dollar.

Friday's auction marked the monetary authority's first intervention selling dollars directly on the spot market since Aug. 30.

Policymakers on Wednesday accelerated their tightening pace with a 100 basis-point hike, bringing interest rates to 12.25%. They also signaled matching moves for the next two meetings - a move that cited the market's negative reception of the fiscal package as a factor worsening inflation dynamics.

Despite the central bank's hawkish stance and the currency interventions, including a dollar-repurchase agreement auction held on Thursday, the real is now down about 20% year-to-date. (Reporting by Andre Romani in Sao Paulo and Marcela Ayres in Brasilia; Editing by David Gregorio)