By Jamie McGeever and Luana Maria Benedito
SAO PAULO/BRASILIA (Reuters) - Brazil's real rose for the first time in a week on Thursday, bouncing back from another record low against the dollar after the central bank waded into the currency derivatives markets with its first intervention in nearly three months.
The central bank's decision to sell $1 billion of foreign exchange swap contracts was its first intervention since it sold dollars on the spot market in late November. It came after President Jair Bolsonaro said he thought the dollar was "a little too high" as it sailed above 4.38 reais (BRBY).
The sale of 20,000 currency swaps pushed the dollar as low as 4.31 reais from a peak above 4.38 reais. At the close of trading the dollar was down 0.35% on the day at 4.3355 reais.
On Wednesday night, central bank president Roberto Campos Neto said repeatedly in a TV interview that the real is a floating exchange rate. Also late on Wednesday, Economy Minister Paulo Guedes said a weak currency is "good for everyone".
"The market went into the Campos Neto interview last night expecting verbal intervention but didn't get it," said a hedge fund manager in Sao Paulo.
"So the real, which was already extended on the weak side, got even sillier. Then the central bank came in," he said.
The real's slide past 4.38 per dollar earlier on Thursday was the fifth session in a row it hit a record low, accumulating a roughly 9% fall this year to make it one of the worst-performing currencies against the dollar.
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The selling pressure on the real had intensified early on Thursday after Campos Neto and Guedes's relaxed attitude to the currency's recent steady and intensifying depreciation the night before.
"Interest rates are a little lower, which is good for everyone. At the same time, a slightly higher (dollar), which is good for everyone. More exports, more import substitution," Guedes said.
When the dollar was down at 1.80 reais, exports fell but "everyone was going to Disneyland, maids were going to Disneyland," Guedes said, adding that a benchmark interest rate at 4.25% and dollar above 4.00 reais is better than rates of 14% and the dollar at 1.80 reais.
Economic data earlier on Thursday also contributed to gloomy sentiment, with figures showing that services activity in Brazil shrank in December — the latest in a series of indicators suggesting the economy is losing steam.