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Exchange Rate Exposure, Foreign Currency Debt, and the Use of Derivatives: Evidence from Brazil

Listed author(s):
  • José Luiz Rossi Júnior
Registered author(s):

    This paper studies the exchange rate exposure and its determinants for a sample of nonfinancial Brazilian companies from 1996 to 2006. The results indicate that the number of firms exposed to exchange rate fluctuations is higher in periods of crisis and under a fixed exchange rate regime. In addition, the results point out that, although companies' international activities, operational hedging, and financial policies are important determinants of firms' exposure, the changes in companies' exposure that took place when Brazil moved from a fixed to a floating exchange rate regime were mainly driven by changes in companies' foreign currency borrowing and the use of derivatives that occurred in that period.

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    File URL: http://hdl.handle.net/10.2753/REE1540-496X470104
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    Article provided by Taylor & Francis Journals in its journal Emerging Markets Finance and Trade.

    Volume (Year): 47 (2011)
    Issue (Month): 1 (January)
    Pages: 67-89

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    Handle: RePEc:taf:emfitr:v:47:y:2011:i:1:p:67-89
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