The dollar rose and even surpassed the level of 5.30 Brazilian real, with new concerns about the global banking sector

The main shareholder of the credit, Saudi National Bank (SNB), has ruled out providing further financial assistance to the bank.

InfoMoney team

Mar 15, 2023 9:49 AM – Updated 1 hour ago

The dollar rose on Wednesday morning (15) and reached above R$5.30, as investors returned to fleeing to safe-haven assets after concerns over Credit Suisse revived broader concerns about the international financial sector in the wake of bank failures in the US.

At 9:53 AM (Brasilia time), the trade dollar rose 0.41% to R$5.279 in purchases and sales, reaching a maximum of R$5.329 at the start of negotiations, the highest intraday level since Jan. 6. However, it pared gains slightly after weaker-than-expected data in US retail sales and producer inflation.

At 9:07 am, the spot dollar was up 1.30% at R$5.3258. In B3, dollar futures expiring in April rose 1.35% to R$5.3430 at the start of negotiations. The previous day, the quoted dollar spot closed the day at R$5.2577, down 0.21%.

The central bank will be holding an auction of up to 16,000 conventional exchange rate swap contracts in this trading session for the purpose of extending to maturity May 2, 2023.

Credit shares recorded a sharp decline on Wednesday morning and led to a session of extreme risk aversion in the markets in general, after the main shareholder of the Swiss institution, the Saudi National Bank (SNB), from Saudi Arabia, ruled out the possibility of providing more financial assistance to the company. “The answer is absolutely not, for many reasons that go beyond the simplest reasons, which are regulatory and legal,” said Ammar Al-Khudairi, head of the Swiss National Bank. Around 7:40 a.m. (Brasilia time), Credit Suisse fell about 20% on the Zurich Stock Exchange.

The day before, Credit Suisse had already said that it had identified “significant weaknesses” in the disclosure of financial results for recent years due to ineffective internal controls. In its 2022 annual report, the Swiss bank said its leadership, including Chief Executive Officer Ulrich Korner and Chief Financial Officer Dixit Joshi, who joined the bank last year, had concluded that its controls were not effective.

(With content from Reuters and Estadão)