The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Brazil: No end to real’s rise

Brazil’s government is a victim of its own economic success.

The Brazilian government is concerned about the real appreciating against the dollar but the tax measures it has taken so far offer little respite for the climbing currency.

On November 18 the Brazilian government announced plans to place a 1.5% tax on those issuing depositary receipts in international markets in a bid to prevent companies from selling shares abroad rather than locally. This new measure aims to balance out distortions caused by the 2% IOF tax on foreign investors when they buy stocks and fixed-income securities. This IOF tax was introduced on October 19 to curb a rally during which the real appreciated 43% against the dollar in the previous 12-month period.

It seems unlikely that either of these measures will curb real appreciation if macro conditions continue to improve. On November 23, the real strengthened 0.4% to R$1.725 to the dollar.

Commodity prices continue to tick upwards. With the Brazilian economy strongly tied to them, Brazilian assets stay attractive despite the new taxes.

Further real pressure is coming from investors that aren’t willing to sell. While Brazil stays relatively attractive and continues to benefit from a risk-positive environment investors already holding Brazilian assets are staying put.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree