The Brazilian central bank has placed curbs on short selling, Financial Times reports. Banco Central do Brasil will require banks to meet a reserve requirement on large bets against the dollar.
The controls, which will mostly affect onshore commercial banks, are planned to improve the functioning of the foreign exchange market and reduce short positions in the system. Under the central bank’s plan, Brazilian financial institutions must deposit 60% of their short dollar positions with the central bank after subtracting either $3 billion or the value of their tier-one capital, whichever is smaller.
Click here for the story from Financial Times.
Click here for additional coverage from Reuters.