Living with a Floating Exchange Rate

Maryse Farhi () and Marcos Antonio Macedo Cintra ()

Brazilian Journal of Political Economy, 2000, vol. 20, issue 3, 359-364,

Abstract: Since the implementation of a floating exchange system by the Brazilian economicauthorities in mid-1999, the trajectory of the real exchange rate has been characterizedby 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 aless turbulent ‘relationship’ with a floating exchange regime. Nevertheless, any possible benefitsfrom this market to the Brazilian economy would require: the routine use of financialderivatives by economic agents in their business management, the elimination of any restrictionto access to derivative markets by foreign investors, and the improvement of supervisoryand regulatory mechanisms. JEL Classification: E42; E58; F31.

Keywords: Exchange rate regime; exchange rate; floating exchange rate; stabilization; regulation (search for similar items in EconPapers)
Date: 2000
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