Brazil’s real posted its biggest weekly gain since March after the central bank said it will extend daily support for the currency for at least another six months as part of an effort to curb inflation.

The real climbed 1.6 percent this week to 2.1938 per U.S. dollar at the close in Sao Paulo. That’s the strongest level since April 9. Its rally since June 20 is the biggest among 31 major currencies tracked by Bloomberg after the Russian ruble. The real gained 0.1 percent today as three-month historical volatility dropped 0.6 percent to 10.27 percent, a one-year low.

“The real is reflecting the extension of the central bank’s intervention,” Cristiano Oliveira, the chief economist at Banco Fibra SA in Sao Paulo, said in a phone interview. “There was some speculation they would pare it down and they didn’t. That favors the currency and gives some reassurance that we won’t see high volatility in the next few months.”

The currency fell earlier today as Brazil reported a primary deficit, excluding interest payments, of 10.5 billion reais in May, compared with a surplus of 16.6 billion reais in the previous month. The median forecast of nine economists surveyed by Bloomberg was for a balanced primary budget.

The primary surplus in the 12 months through May narrowed to 62.9 billion reais from 79.4 billion reais in the prior month, compared with the target of 80.8 billion reais for 2014.

“We are working to meet the fiscal target,” Treasury Secretary Arno Augustin told reporters in Brasilia. “Revenue in May was way below forecast, and we expect it to recover in the coming months.”

Currency Swaps

The central bank said June 24 that it will keep offering $200 million in currency swaps each business day through at least year-end and provide additional dollars as needed. The program, which helped make the real the best performer this year among major currencies, had been scheduled to end in June.

Brazil sold $198.8 million of foreign-exchange swaps today to support the real and limit import price increases and rolled over contracts worth $494.5 million.

The central bank announced it will sell up to $3.5 billion forein-exchange credit line at an auction in June 30, according to a statement published today. The last time the authority held such auction was on March 31.

Swap rates, a gauge of expectations for interest-rate moves, rose nine basis points, or 0.09 percentage point, to 11.50 percent on the contract maturing in January 2017. They pared their weekly decline to three basis points.

A bigger-than-forecast drop in federal tax revenue indicated fiscal deterioration and offset evidence of slower inflation, according to Oliveira.

Federal tax revenue fell to 87.9 billion reais in May from 105.9 billion reais in the prior month, the government reported today. The median forecast of economists surveyed by Bloomberg was for a decline to 90.1 billion reais.

The Getulio Vargas Foundation reported that its index of wholesale, construction and consumer prices climbed at an annual rate of 6.24 percent this month, compared with 7.84 percent in May. The gauge fell 0.74 percent in June from a month earlier, the biggest drop since March 2009.