By Jamie McGeever
BRASILIA (Reuters) - Brazil's real rose more than 1% against the dollar on Friday to chalk up its biggest rise since late November after the central bank intervened in the swaps market for the second straight day following the currency's slump this week to new lows.
In late trading, the real was changing hands at 4.2940 per dollar, up 1.3% on the day. The greenback slid below 4.30 reais
On Thursday, the greenback was at a record high above 4.38 reais before the first central bank intervention.
(Graphic: Brazil real- daily change - https://fingfx.thomsonreuters.com/gfx/mkt/13/2149/2117/BRLWEEKLY.png)
The real was on course for a 0.5% rise on the week, snapping a run of six consecutive weekly declines that had brought its year-to-date losses against the dollar close to 10%.
The intervention announcement "reaffirms expectations that the central bank would eventually try to cap the upside in dollar/real, and could bring some near-term support to the currency," Barclays analysts wrote in a client note.
"However, we remain structurally bearish on the real, as disappointing growth, the erosion of carry, and a widening current account limits the attractiveness of Brazil as a destination for foreign portfolio flows," they added.
The central bank offered relief to those market participants bullish on the real, who had seen the exchange rate go against them. But traders said it may have to come back into the market if the real is to stage a more sustained recovery.
"$2 billion in FX swaps is nothing. They were able to curb the depreciation and make the real outperform, at least today. However, the framework is still very fragile," said one senior trader in Sao Paulo.
"With (market-based) rates going down and growth deteriorating, the market will try to buy dollars back," he said.
Citing weak economic growth, unattractive yields and a widening current account deficit, Capital Economics on Friday revised their dollar/real outlook for this year to 4.50 from 4.25, one of the most bearish real forecasts among economists.
(Reporting by Jamie McGeever; Editing by David Gregorio)