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© Reuters. A view shows the Central Bank headquarters building in Brasilia, Brazil October 4, 2021. REUTERS/Adriano Machado/Files SAO PAULO (Reuters) – Brazil’s central bank sold $1 billion worth of currency swaps in a surprise auction on Wednesday afternoon, boosting the local currency from nearly six-month lows.

The central bank said it had sold all 20,000 foreign exchange swap contracts offered in a nonscheduled auction – double the volume offered in the bank’s last surprise auction on Sept. 30.

The sale had an immediate impact on the real, which reversed losses to trade up around 0.5% at 5.51 reais to the dollar.

The real is down by nearly third against the U.S. dollar this year, with investors spooked by political risks, a fragile economic recovery and the prospect for rising interest rates in more wealthy economies.

Last month, Brazil’s central bank said it would hold additional twice weekly auctions of traditional currency swaps, to address demand from banks dismantling their “over-hedge” positions in derivative markets.

Earlier on Wednesday, the central bank’s Political Economy Director Fabio Kanczuk said that there had been a smaller-than-expected market reaction to the bank’s announcement of those regular swap auctions.