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Brazil's cenbank announces $1 billion spot auction, reverse FX swap deal for Thursday

BY Reuters | ECONOMIC | 05:55 PM EDT

SAO PAULO, March 18 (Reuters) - The Brazilian central bank will hold a spot dollar auction of up to $1 billion on March 19, and a simultaneous reverse foreign exchange (FX) swap auction, it said in separate statements on Wednesday.

Both deals start at 9:30 local time, the central bank said.

A reverse FX swap, which in this case involves up to 20,000 contracts, is equivalent to buying U.S. dollars in the futures market. (Reporting by Andre Romani, Editing by I?igo Alexander )

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Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

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