Brazil’s central bank reported a sharp deterioration in its swap portfolio performance for June, posting a cash loss of R$9.277 billion ($1.80 billion).
The figure marks a significant reversal from the previous month, when the bank recorded a gain of R$1.375 billion on the same instrument.
893 billion ($4.83 billion) from its foreign exchange reserves, more than offsetting the swap losses on a net basis.
The surge in swap losses underscores the continued cost of the bank’s monetary policy operations in a high-interest-rate environment.
Despite the heavy drag from swaps, the central bank’s overall financial position for the month was cushioned by strong performance in its reserves management.
The bank earned R$24.893 billion ($4.83 billion) from its foreign exchange reserves, more than offsetting the swap losses on a net basis.
This divergence highlights the dual nature of the bank’s balance sheet: while domestic policy tools remain expensive, the yield on external assets continues to provide a buffer.