Living with a Floating Exchange Rate

Vol. 20 No. 3 (2000)

Jul-Sep / 2000
Published July 1, 2000
PDF-Portuguese (Português (Brasil))
PDF-Portuguese (Português (Brasil))

How to Cite

Farhi, Maryse, and Marcos Antonio Macedo Cintra. 2000. “Living With a Floating Exchange Rate”. Brazilian Journal of Political Economy 20 (3):359-64. https://doi.org/10.1590/0101-31572000-1042.

Living with a Floating Exchange Rate

Maryse Farhi
Doutora pelo Instituto de Economia da Unicamp, atualmente desenvolve projeto de pesquisa na Diretoria de Economia do Setor Público da Fundap, com bolsa de pós-doutoramento da Fapesp. São Paulo/SP, Brasil.
Marcos Antonio Macedo Cintra
Doutor pelo Instituto de Economia da Unicamp, pesquisador da Diretoria de Economia do Setor Público da Fundap e professor da Universidade lbirapuera, São Paulo/SP, Brasil.
Brazilian Journal of Political Economy, Vol. 20 No. 3 (2000), Jul-Sep / 2000, Pages 359-364,

Abstract

Since the implementation of a floating exchange system by the Brazilian economic
authorities in mid-1999, the trajectory of the real exchange rate has been characterized
by extreme volatility, inherent in such a system. The Brazilian financial market, however,
has the advantage to possess a reasonably liquid derivative market which can contribute to a
less turbulent ‘relationship’ with a floating exchange regime. Nevertheless, any possible benefits
from this market to the Brazilian economy would require: the routine use of financial
derivatives by economic agents in their business management, the elimination of any restriction
to access to derivative markets by foreign investors, and the improvement of supervisory
and regulatory mechanisms.

JEL Classification: E42; E58; F31.


Keywords: Exchange rate regime exchange rate floating exchange rate stabilization regulation