BC’s assessment of exchange rate law shows progress in bureaucracy and international use of the real, says Campos Neto

Central Bank President Roberto Campos Neto said Wednesday that the authority’s assessment of the changes promoted by the new International Foreign Exchange and Capital Law shows important progress, especially in reducing bureaucracy and expanding the international use of the real .

Opening a seminar commemorating the first 500 days of the Foreign Exchange Law in 2021, Campos Neto said the legislation strengthened the principle of freedom of trade and flow of capital, without value limitations, moving away from concepts “inherited from control of the timing of capital flows”.

For example, the BC President cited openness to the possibility of waiving additional documentation for operations based on their risk. Previously, it was mandatory to submit documentation for any transaction over $3,000.

With the new exchange law, Campos Neto underlined, there is now a minimum value for providing information to the BC in its system, equal to 1 million dollars for external credit in general and 100 thousand dollars for direct investments.

“Previously, all operations had to be registered with the BC, causing excessive bureaucracy and very high costs for small operations, disproportionately impacting small businesses or families,” Campos Neto said in his statement.

He also highlighted the exemption from registration with the BC for several operations, such as providing technical assistance and training to businesses in Brazil. “Simplification helps expand the technical capacity of Brazilian companies, fostering the technology transfer environment,” said Campos Neto.

The BC president also said there has been an increase in the international use of Brazilian currency due to greater freedom in the use of non-reais non-resident accounts under the new foreign exchange law. Citing the BC’s consultations with private sector entities, Campos Neto said the trend is towards expanding the international use of real.

“We have an example of expanding the use of the national currency when a Brazilian traveler is abroad and can pay for his purchases in a foreign business establishment using reais, including Pix,” Campos Neto said.

Joining Campos Neto at the seminar, the Central Bank’s director of regulation, Otavio Damaso, said the authority still has a long way to go in regulating foreign exchange and international capital law, and intends to publish new rules this year on three main themes: interbank market, non-resident investments and virtual assets.

Source: Terra

Rose

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