UPDATE 1-Brazil central bank to sell up to $1 bln in spot FX market

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BRASILIA/SAO PAULO, March 6 (Reuters) - Brazil's central bank will auction up to $1 billion in the spot currency market on Monday, it said on its website on Friday, marking its first foreign exchange intervention selling dollar reserves outright since November.

The announcement follows the central bank's sale of $5 billion worth of currency swap contracts this week in an effort to slow the sharp depreciation of the local currency, amid calls from investors to intervene in the spot market, too.

Brazil's currency, the real, hit a record-low on Friday, at 4.67 per dollar, and has lost more than 13% this year one of the worst-performing currencies in the world as the country's economic growth and interest rate outlooks have dipped sharply.

The central bank's return to the spot market, dipping into some $360 billion of international reserves, comes amid surging market volatility, which has been linked with recent escalations in the central bank's interventions.

Implied one-month and three-month dollar/real volatility rose on Friday above the level when the central bank last sold FX reserves in November, fast approaching levels seen in August, when policymakers sold dollars in the spot market for the first time in 10 years.

After the U.S. Federal Reserve's emergency interest rate cut this week, Brazil's central bank said it was monitoring financial conditions as coronavirus fears hammered local markets and triggered a wave of downward revisions of growth forecasts. (Reporting by Jamie McGeever, Marcela Ayres and Jose de Castro Editing by Brad Haynes and Leslie Adler)

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