There is a simple rule among a large part of Brazil’s wealthiest classes that dictates, if you have the opportunity not to do so, avoid keeping your money in domestic bank accounts. The volatility and the relative weakness of the Brazilian Real against the U.S. Dollar, Euro, Pound sterling, or Swiss Franc lead many of the country’s richest individuals to hold savings abroad in foreign money, where they believe it will be less affected by exchange rate fluctuations.
However, restricted to those owning businesses outside of Brazil or with foreign residence permits, holding money in currencies other than BRL is an opportunity exclusive to a precious few in Latin America’s largest economy. This could soon change, however, as far-right President Jair Bolsonaro is set to ratify legislation permitting individuals and legal entities in Brazil to open domestic bank accounts in foreign currencies.
Approved by the Senate last week, the new set of rules — known as the Legal Framework for the Foreign Exchange Market — has been pending in Congress for two years now. Submitted by the president’s office with the approval of Central Bank head Roberto Campos Neto, the idea was that Brazil’s foreign exchange market needed updating, setting clear rules for the use and ownership of international accounts, and opening up the traditional market to payment companies. The government promises that a competitive regulatory framework will facilitate the purchase of Brazilian goods by importers and heat up the foreign market.
After the lower house approved the bill in February, the Senate signed off on it this week without making any changes. Only six senators opposed...
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