Brazil’s Foreign Reserves Reach New Record In July

Brazil’s foreign currency reserves reached a new record in July on persistent government purchases of U.S. dollars in recent months, the Brazilian Central Bank said Tuesday.

Brazil’s foreign reserves totaled $211.87 billion at the end of July, up from $208.4 billion at the end of June.

On July 16, the central bank announced that country’s foreign currency reserves had reached a new record, on the opportunity totaling $209.6 billion.

In the first seven months of 2009, reserves were up $5.1 billion. Reserves ended last year at $206.8 billion.

Reserves grew sharply from 2005 through mid-2009 after the central bank started purchasing dollars from the spot market in October 2005. Reserves stood at $53.779 billion at the end of 2005.

Reserves declined beginning in October of 2008 as the central bank loaned dollars to Brazilian businesses in the face of a global credit crunch. The central bank also sold dollars directly from reserves to the foreign exchange market via spot auctions.

Earlier this year, however, the government reversed course, buying dollars from the market at spot auctions.