BIS-Brazil real use grows on futures, options mkts

LONDON, June 13 (BestGrowthStock) – The Brazilian real is now the
second most important currency on international derivatives
exchanges in terms of open positions, behind the U.S. dollar but
ahead of the euro, the Bank for International Settlements said.

Open interest in futures and options contracts on the
Brazilian real rose by 41 percent in the first three months of
2010 to $0.14 trillion, the BIS said in its quarterly report
published on Sunday.

“The importance of the real in the currency segment of the
futures and options market is due to the fact that there is
comparatively little trading over the counter,” the BIS said.

The real is not a fully convertible currency, but it has a
well developed and liquid futures market.

Total open interest in FX futures and options contracts
across all currencies rose by 29 percent to $0.4 trillion in the
first quarter, far outpacing growth in turnover, which rose by
11 percent to $9 trillion.

Open interest in U.S. dollar contracts was $0.33 trillion by
the end of March and in euro contracts it was $0.10 trillion,
the BIS said, adding that interest in sterling-related contracts
rose 57 percent to $0.02 trillion.

Brazil’s currency is attractive for investors because of its
strong economy, high interest rates — which were raised above
10 percent last week [ID:nN09179023] — and its status as a
commodity-linked currency. The real is, though, vulnerable
during times of heightened aversion to risk on financial
markets.

Recent data showed Brazil’s economy grew at its fastest pace
in at least 14 years in the first quarter. [ID:nN08250176]

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(Reporting by Jessica Mortimer; Editing by Susan Fenton)

BIS-Brazil real use grows on futures, options mkts