The Brazilian experience in managing interest-exchange rate nexus
This paper addresses four main questions: firstly, it discusses some theoretical background related to the interest-exchange rate nexus; secondly, it makes an attempt to explain why the interest rate in Brazil is so high, examining briefly the main explanations for it; thirdly, it describes Brazilâ€™s foreign exchange markets, their size and hierarchy; and lastly, it explains the carry trade dynamics considering the institutionalism of the Brazilian foreign exchange market and also the government policies envisioned to curb it.
|Date of creation:||May 2013|
|Date of revision:|
|Publication status:||Published in Berlin Working Papers on Money, Finance, Trade and Development, May 2013|
|Contact details of provider:|| Web page: http://finance-and-trade.htw-berlin.de|
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- Dubravko Mihaljek & Frank Packer, 2010. "Derivatives in emerging markets," BIS Quarterly Review, Bank for International Settlements, December.
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