Brazil moves to curb the real

Brazil took another bold move yesterday to curb its hard-charging currency by making it more costly for banks to bet the real will keep strengthening. The central bank introduced a reserve requirement on banks’ short positions in US dollars – a bet the real will strengthen versus the greenback – in hopes of reducing speculative trading in the foreign exchange market that has pushed the Brazilian currency to a two-year high. The real weakened 0.66 per cent after the measures were unveiled to $1.686. It has gained about 13 per cent since last May, and has been dubbed the world’s most overvalued major currency.