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Capital account regulation in Brazil: an assessment of the 2009-2013 period

Author

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  • Daniela Magalhães Prates
  • Luiz Fernando de Paula

Abstract

Brazil was one of the emerging countries that had a stronger trend of currency appreciation from the 2nd quarter of 2009 to July 2011. Under this context that can be understood the implementation of capital account regulation (CAR) after 2009, which was complemented with another kind of regulation, the so-called FX Derivatives Regulation (FXDR). This paper shows that only when Brazilian government adopted these two kinds of regulations simultaneously, the policy effectiveness increased in terms of protecting the Brazilian currency from upward pressures. Brazilian experience also highlights that it is not possible to establish a hierarchy between temporary instruments to manage capital flows and permanent prudential measures, as supported by the IMF current approach. JEL Classification: F31; F32; F53,

Suggested Citation

  • Daniela Magalhães Prates & Luiz Fernando de Paula, 2017. "Capital account regulation in Brazil: an assessment of the 2009-2013 period," Brazilian Journal of Political Economy, Center of Political Economy, vol. 37(1), pages 108-129.
    • Handle: RePEc:ekm:repojs:v:37:y:2017:i:1:p:108-129:id:108
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    Cited by:

    1. Bruno Thiago Tomio & Guillaume Vallet, 2021. "Carry Trade and Negative Policy Rates in Switzerland : Low-lying fog or storm ?," Post-Print halshs-03669561, HAL.
    2. Ferry Syarifuddin, 2020. "Macroeconomic Consequences Of Foreign Exchange Futures," Working Papers WP/14/2020, Bank Indonesia.

    More about this item

    Keywords

    Capital account liberalization; capital controls; Brazilian economy;
    All these keywords.

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations

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