VALE Vale SA

By Jeffrey T. Lewis

SAO PAULO--The Brazilian real weakened against the dollar Friday as the central bank stepped in and sold swap contracts that support the U.S. currency, and shares fell.

The Ibovespa stocks index fell 1.4% to 52908 points. The real exited active trading at 3.5732 to the dollar, according to Tullett Prebon via FactSet, after closing at 3.5319 on Wednesday. Thursday was a holiday in Brazil and financial markets were closed.

Brazil's central bank has been auctioning reverse currency swap contracts for weeks, with the intention of weakening the real, or at least slowing its gains against the dollar, according to traders. The bank wants to keep the real between 3.50 and 3.70 to the dollar, they say. On Friday the bank sold almost $1 billion worth of the contracts.

Efforts to remove Brazilian President Dilma Rousseff have progressed since early February, with the lower house of the country's Congress voting last Sunday to send the process to the Senate for trial. Investors would prefer to see the president ousted, so any step forward in the process tends to boost the real and shares.

Senate leaders said earlier this week that the upper house will vote by May 17 on whether to try Ms. Rousseff. If the Senate votes to accept the process, Ms. Rousseff will have to step aside for up to 180 days while the trial takes place.

Iron mining company Vale SA had the biggest decline in the Ibovespa on Friday, with its preferred shares dropping 8.2% to 15.31 reais.

Write to Jeffrey T. Lewis at jeffrey.lewis@wsj.com

(END) Dow Jones Newswires

April 22, 2016 17:35 ET (21:35 GMT)

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