Independent financial institutions will now be allowed to be
short by as much as $3 billion worth of dollars, up from the $1
billion threshold imposed in July, according to a statement
published in the bank’s Sisbacen newswire.

The move takes effect Dec. 20.

The bank also changed the period of calculation of such
requirements to the average of five business days, longer than
the prior one day calculation.

The real strengthened slightly, gaining about 0.1 percent to
2.0975 to the dollar. The currency has shed 12.2 percent this
year.

“This is to anchor the dollar and prevent any further gains”
relative to the real, said a São Paulo-based currency trader who
declined to be quoted because is not allowed to speak to the
press. “I think the market couldn’t sell dollars or increase
their sales of dollars – this measure opens room for them to
sell the greenback.”

Central bank policymakers also eliminated a rule urging
financial institutions to set aside reserve requirements on
their foreign exchange short positions topping their reference
capital base.