Brazil’s real fell as the central bank’s dollar purchases fueled speculation the government may be seeking to keep the currency weaker than 1.80 per dollar. The real dropped 0.2 percent to 1.8180 per U.S. dollar, from 1.8147 yesterday. It has lost 5.5 percent this month, the worst-performing major currency, as Brazil imposed measures to reduce its value. The central bank said it bought dollars in the spot market yesterday at 1.8210 reais each, part of its effort to keep the currency from appreciating. The real will end the year at 1.80 per dollar, compared with a 1.75 forecast a week ago, according to the median estimate of the five most accurate economists in the central bank’s weekly survey of about 100 analysts released March 19. “Yesterday the central bank bought dollars above 1.82,� Hideaki Iha, a currency trader at Fair Corretora de Cambio e Valores, said by phone from Sao Paulo. “This is leaving the market in doubt about the floor for the currency.� The real earlier fell as much as 0.8 percent after sales of previously owned U.S. houses unexpectedly fell in February, showing that the real-estate market in the world’s biggest economy is taking time to rebound. Brazilian policy makers increased dollar purchases this month after the real touched 1.6890 per U.S. dollar on Feb. 29, the strongest level since Oct. 31. The central bank’s foreign reserves have risen 12.4 percent in the past year to $356 billion. Brazilian Economic Growth Latin America’s largest economy grew 2.7 percent last year, its second-weakest performance since 2003, while industrial output dropped the most in three years in January, according to data published this month by the statistics agency. Brazil’s main tool for avoiding an influx of cheap imports is the administration of its currency rate, Finance Minister Guido Mantega said in the Senate testimony March 13. While Brazil is committed to a floating rate of exchange, the country isn’t going to play the “idiot’s role� in the face of other nations devaluing their currencies, he said. Futures yields fell for a second day amid concern the U.S. housing market is struggling to recover and as investors speculated rising oil prices may choke off global economic growth. The yield on the contract due in January fell four basis points, or 0.04 percentage point, to 8.93 percent. “The external markets are pushing rates down� Luciano Rostagno, chief strategist at Banco West LB, said by phone from Sao Paulo. “There’s concern about the effect of high oil prices on the global economy.� To contact the reporters on this story: Josue Leonel in Sao Paulo at jleonel@bloomberg.net; Gabrielle Coppola in Sao Paulo at gcoppola@bloomberg.net To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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