Foreign Exchange Liquidity in Brazil (Stone, Christopher and Yasui)

Recommended by Alvaro Manoel, “From Lombard Street to Avenida Paulista” was signed by Mark Stone, Christopher Walter and Yosuke Yasui. This paper documents and analyzes the foreign exchange liquidity providing measures of the Banco Central do Brasil in response to varied market stresses. These measures appear to have reduced the relative onshore cost of dollar liquidity on impact and seemed to stabilize market expectations of exchange rate volatility. The results suggest that foreign exchange liquidity easing operations may become a standard central bank tool. (pdf in English). See: