Brazilian companies took on $32.3 billion worth of contracts to protect themselves against currency swings in September, when the real currency plunged to an all-time low, data from clearinghouse and market data provider Cetip SA Mercados Organizados showed on Friday. Companies bought $21.4 billion worth of so-called currency term contracts last month, 26 percent more than a year earlier, while they sold $10.9 billion, Cetip said. The real, Brazil's currency, shed 9 percent against the US dollar last month alone.
The data comes as debt refinancing and hedging costs rapidly rise in Brazil, where political and economic turmoil are forcing banks to pare back credit. The real has shed 32 percent this year, making it the world's worst-performing major currency this year, according to Thomson Reuters calculations. Debt exposure to foreign currencies looks manageable for most Brazilian companies, which are increasingly using derivatives, including currency term contracts, to help shield their balance sheets from sudden interest-rate or currency fluctuations. Sao Paulo-based Cetip is Latin America's largest securities depositary and clearinghouse.
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