FOREX Report: Brazilian Real BRL

Brazil Economic Information

Central Bank: Central Bank of Brazil

The Central Bank of Brazil has kept the selic rate steady at 8.75% since July 2009.
Review Of COPOM Meetings and Short-Term Interest Rates

Meeting TBC/ SELIC rate targets TBAN Actual SELIC rate

Period % p.m. % p.m.
nº date bias (1)(6) (2)(6) % (3) % p.y. (4)
148th 1/27/2010 1/28/2010 - 8.75
th
147 12/9/2009 12/10/2009 - 1/27/2010 8.75 1.09 8.65
th
146 10/21/2009 10/22/2009 - 12/9/2009 8.75 1.09 8.65
th
145 9/2/2009 9/3/2009 - 10/21/2009 8.75 1.09 8.65
144th 7/22/2009 7/23/2009 - 9/2/2009 8.75 0.99 8.65

(1) From July/96 to March/99, the Copom (Monetary Policy Committee) set up the TBC rate (basic interest rate),
which were elimination in March/99. Since then, Copom has been targeting the Selic rate (short-term interest rate)
as main monetary instrument.
(2) The TBAN (Financial Assistance Rate) was set up in August 28, 1999 and eliminated in March/99. The TBC and
TBAN established a financial assistance band system and were the main Central Bank operational benchmarks in
the period.
(3) Cumulative interest rate for the period.
(4) Annual average interest rate.
(5) The TBC and TBAN set up in the 17th Copom meeting did not become effective.
(6) From January/98 onwards, interest rates were released in annualized terms.

Currency: Brazilian real (R$ or BRL)

After their currency depreciated sharply in 2001 and 2002, the Brazilian government implemented an aggressive
economic program to curb inflation and reduce debt. Since 2004, Brazil has enjoyed continuous economic growth
and increases in employment and real wages. While this growth has had a positive impact on Brazil's economy, a
quarter of the population remains below the poverty line. As the largest economy in South America and a growing
presence in the world markets, Brazil has gained the confidence of many foreign investors.

Key Indicators Data Period As of

Consumer Price 4.22% YoY 12/09

Index (CPI)

Gross Domestic 4.30% YoY 03/10

Product (GDP)

Current Account (3.84B) JAN 02/10

Balance (BoP)

Official Foreign 240.48B na 02/10

Reserves
Key industries:
Textiles, shoes, chemicals, cement, lumber, iron ore, tin, steel, aircraft, motor vehicles and parts, other
machinery and equipment.

Agricultural products:
Coffee, soybeans, wheat, rice, corn, sugarcane, cocoa, citrus and beef.

Export commodities:
Transport equipment, iron ore, soybeans, footwear, coffee and autos.

Import commodities:
Machinery, electrical and transport equipment, chemical products, oil, automotive parts and electronics.

A few factors to consider when evaluating the Brazilian real:

Reasons to consider

• Industry experts recently upgraded the entire country's credit rating to "investment grade".
• Ranked 8th in the top 10 oil producing nations, Brazil's economy is self sufficient in oil.
• World's largest producer of Ethanol made from sugar cane. This potentially insulates the country from wild
swings in the price of oil.

Risk factors to consider

• As an emerging market, Brazil's economy and the value of the real can be susceptible to the fluctuation of
global risk aversion.
• The Brazilian real was down -23.09% against the U.S. dollar in 2008.

Reference

Everbank
Central Bank of Brazil