Incentivo perverso das reservas internacionais: O caso das empresas exportadoras brasileiras
AbstractStarting with Lehman Brother’s demise in September 2008, the Brazilian real fell 42% vis-à-vis the US dollar. Such large exchange rate depreciation would typically cheer exporters up. However, it was later found that many export firms, including multibillion dollar ones, had suffered large financial losses. These capital losses came not from garden variety currency mismatches, but from complex derivative products. We analyze the problems created by this misuse of derivatives by export companies in Brazil in 2008. Besides a careful description of the most relevant cases and of the derivative that caused the problems, we also present evidence that the derivative was not used as a hedge, but as a speculative instrument. The Brazilian case—just one among many where export firms in emerging markets sold USD short much beyond the point necessary to hedge their USD revenues—shows that the benefits of international reserves accumulation by the government may be jeopardized by perverse incentives generated to the private sector. We discuss and recommend a few prudential regulation measures.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Department of Economics PUC-Rio (Brazil) in its series Textos para discussão with number 564.
Date of creation: Nov 2009
Date of revision:
Contact details of provider:
Postal: Rua Marquês de São Vicente, 225, 22453-900 Rio de Janeiro, RJ
Phone: 021 35271078
Fax: 021 35271084
Web page: http://www.econ.puc-rio.br
More information through EDIRC
International Reserves; Derivatives; Financial Hedge; Export Firms. JEL Codes: F41; G01; G15; G32; 34; G38.;
Find related papers by JEL classification:
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
- G01 - Financial Economics - - General - - - Financial Crises
- G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-11-27 (All new papers)
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.