Image with the title 'New Legal Framework for Foreign Exchange: what is the impact on the currency market?', with the hashtag #diretodoblog. A hand holds a stylized illustration of a banknote
In recent years, Brazil has been consolidating itself as an important global investment hub, both in terms of investments in the productive sector and in financial products. To give you an idea, direct investment in the country went from US$4.3 billion in the late 1990s to US$88.3 billion in 2018. In the same period, the total foreign exchange contracted in exports and imports grew from US$74.5 billion to US$405.9 billion, according to data from the Central Bank .
In this sense, the Brazilian foreign exchange market has been undergoing major transformations. At the end of last year, for example, the country took another step towards modernizing and streamlining this market south africa mobile database with the enactment of the new Law 14,286/21, which modernized an 87-year-old legislation by replacing the 1935 law.
Authored by the Executive Branch , the proposal, which became known as the new legal framework for foreign exchange in the country, seeks to promote greater insertion of the Brazilian economy in the international market, as well as to facilitate the flow of payments and reduce costs of foreign exchange transactions, in addition to expanding access for foreign investors to the national market. With this, the expectation is that the Brazilian currency will gain notoriety, culminating in the international convertibility of the Real.
Under the new legal framework, the Central Bank takes on some responsibilities that, until now, were the responsibility of the National Monetary Council (CMN), such as the regulation of operations, futures exchange contracts, as well as the organization and supervision of stock and exchange brokerage firms.
In this way, the institutions will regulate the new rules for the functioning of the market – in a process that could take up to a year to be completed – in an attempt to ensure that the Brazilian currency is effectively transformed and widely accepted in negotiations between countries, people and companies.