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Brazil's audit court acquits former central bank, FonteCindam execs

Brazil's federal audit court TCU has absolved former heads of Banco Central do Brasil and defunct bank FonteCindam for the damage caused by the central bank's intervention in the foreign exchange market to bail out the bank during the 1999 currency crisis, Valor Econômico reported.

The measure was justified due to the "systemic risk" in the financial system at the time, according to the report. Benjamin Zymler, controller general for the TCU, said the central bank did not commit any legal or economic irregularities. The case also involved subjective matters, making it possible to review a previous ruling, Zymler noted.

The TCU previously ordered FonteCindam and its officials to return 3.7 billion Brazilian reais to the Treasury, on top of the fine of 1 billion reais against the bank and 1 million reais against the former central bank managers. At the time, the court said the central bank aided FonteCindam sell dollars at below-market prices, which harmed Brazil's public finances.

As of March 13, US$1 was equivalent to 3.83 Brazilian reais.