Exchange Law: what changes now?

What we will see in this article:

The Foreign Exchange Law, or Foreign Exchange Law, is responsible for regulating foreign exchange operations. It was developed to control the entry and exit of foreign currency in Brazil, guaranteeing the country’s financial stability and protection of the national economy.

It is a mechanism that ends up encompassing international remittance operations and investments abroad. Furthermore, the law determines that these operations should only be carried out by financial institutions authorized by the Central Bank (BC).

If you are interested in the financial market, being on top of how the Foreign Exchange Law works and what impacts it has on the economy will help you to draw up a good investment strategy.

Impacts of the Exchange Law

Among the main impacts that the Exchange Law can cause, the protection of the Brazilian economy against speculation is the greatest, since exchange operations are regulated and supervised by the Central Bank.

Can also directly influence the exchange rate, as both the purchase and sale of foreign currencies are controlled by the government. Thus, another point of impact is the stimulation in the domestic market, making Brazilian companies invest in local businesses.

On the other hand, not everything is completely positive. The Exchange Law has some negative factors, such as the difficulty of accessing other countries’ currencies in times of crisis, affecting companies that depend on imports or exports.

What changes now?

The new Foreign Exchange Law was regulated by the Central Bank and the National Monetary Council (CMN), entering effective on December 31, 2022. The change was due to promoting the free movement of capital.

According to the BC’s position, it also aims to carry out operations in the foreign exchange market in a less bureaucratic way. O regulatory body said the old foreign exchange legislation was framed in 1920. But at that time, Brazil was experiencing a shortage of foreign currency.

Now, years later, much has changed. Therefore, the The expectation is that the new Exchange Law legislation will contribute to reducing the costs of buying and selling dollars, also providing more legal security and facilitate transactions with other countries.

Changes with the new law

See the most important points that came into effect in 2023:

Formerly under the Foreign Exchange Law, if a person entered or left Brazil with more than R$10,000 in cash while traveling, he would have to present a declaration. Now, the amount has changed to $10,000. According to the Central Bank, the new dollar limit is to be in line with the rest of the world.

export financing

Brazilian banks can finance the purchase of Brazilian exports abroad. The novelty is to contribute to greater insertion and competitiveness between Brazilian products and services in relation to other countries.

Transfers in Reais outside Brazil are now allowed through accounts in Reais abroad. The Central Bank’s proposal is to allow the international use of the real under conditions similar to other currencies.

Purchase and sale of foreign currency

Before prohibited, the change in the law made it possible to buy and sell foreign currency between individuals. But beware, you cannot exceed the limit of up to US$ 500. The idea is meet the most occasional needs, enabling the sale of what is left of foreign currency after an international trip, for example.

Dollar bills in Brazil

Accounts in dollars are only available for specific segments, such as: insurance companies, tourist service providers, agents authorized to operate in foreign exchange and issuers of credit cards for international use.

The director of Regulation at the institution, Otavio Damaso, said that the project authorizes the expansion to other segments “within a medium and long-term process, natural within the convertibility of the real, one of the objectives of the project”.

In addition, another point that caused a lot of controversy in the new Exchange Law was the transfer of the National Monetary Council (CMN) to the Central Bank. The authority to authorize new sectors of the economy to maintain accounts in foreign currency in Brazil passes to the Central Bank.