ISSN 2756-3677
International Journal of Banking and Finance ISSN: 8201-4728, Vol. 7 (9), September, 2023. © International Scholars Journals
Full Length Research Paper
An essay on floating exchange rate policy in Brazil
Alexandre da Silva de Oliveira
Columbia University (USA) and PUC-SP (Brazil)
Email:[email protected]
Accepted 03 November 2016
Abstract
This essay analyzes the exchange rate in Brazil and assesses the trend of free floating, focusing the first ten years of Plano Real (1999-2009) based mainly on the New Developmentalism (ND) approach. The hypothesis is that the trend of overvaluation of exchange rate, especially between 2002-2007, combined with the rise of commodity prices in the international markets and weakness of Brazilian competitiveness have harmed the economic growth, manufactured industrial output and trade balance in Brazil. Thus, there are macroeconomic evidences of Dutch Disease ongoing in Brazil, driving by a low local value added generation and weakness in Brazilian competitiveness.
Keywords: exchange rate, economic growth, Brazilian economy.