Český finanční a účetní časopis 2013(4):7-29 | DOI: 10.18267/j.cfuc.348

BRICS: Exchange Rate policy in Context of Internal and External Equilibrium

Jaroslava Durčáková1, Ondřej Šíma2
1 Prof. Ing. Jaroslava Durčáková, CSc. - profesorka; Katedra měnové teorie a politiky, Fakulta financí a účetnictví, Vysoká škola ekonomická v Praze, nám. W. Churchilla 4, 130 67, Praha 3; <durcak@vse.cz>; Katedra financí a účetnictví, Vysoká škola obchodní v Praze, o. p. s., Spálená 14, 110 00, Praha 1.
2 Ing. Ondřej Šíma - doktorand; Katedra měnové teorie a politiky, Fakulta financí a účetnictví, Vysoká škola ekonomická v Praze, nám. W. Churchilla 4, 130 67, Praha 3; <xsimo09@vse.cz>.

The article deals with the exchange rate policy of Brazil in period 1999 - 2012. The first part informs about the global development of the system of exchange rates and shows marked differences after 2008. This global course is supported in the case of Brazil. Next part is concentrated mostly on the interaction between exchange rate policy and internal and external equilibrium. Brazilian balance of payments seems to be suitable concept to catch these events, including often mentioned impacts of the so called unconventional monetary policy on emerging markets. Besides these effects the Brazilian economy was influenced by long-term changes in the global economy. Rising prices of Brazilian exported commodities belonged to the most important one. These prices influenced the exchange rate of the real. In authors´ point of view the recent development of Brazilian economy indicates the presence of the so called Dutch disease. The disease is closely connected to excessive (real) overvaluation of the currency and increasing volatility of terms of trade. To confirm this idea of the Dutch disease it is necessary to monitor forthcoming years very carefully.

Keywords: Brazil; Exchange rate policy; Balance of payments.
JEL classification: F31

Published: December 1, 2013  Show citation

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Durčáková, J., & Šíma, O. (2013). BRICS: Exchange Rate policy in Context of Internal and External Equilibrium. Czech Financial and Accounting Journal, 2013(4), 7-29. doi: 10.18267/j.cfuc.348
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