Brazilian goverment easing up on exchange control of export businesses, good for BRL?

Discussion in 'Economics' started by Daal, Aug 6, 2006.

  1. Daal


    Now export business can keep up to 30% of what they earn offshore and also they can pay their bills or settle debts offshore using foreign currency. They will also save a lot of money since the brazilian banking system charges taxes on every banking transaction(0.38% of the money except for investments).

    They say they are trying to devalue the BRL(they are assuming the export business is unhappy to hold BRL, which I think is pretty bad assumption given the fundamentals of right now) but in effect they are giving a big tax cut on the export business which will boost the trade surplus even more making the currency more sound also they increasing the freedom of currency exchange, bullish or bearish for the BRL?