The Brazilian real currency (BRL) is considered to be an exotic currency in the Forex market. Brazil is the world’s seventh largest economy.
Trade Surplus or a Trade Deficit?
Brazil runs a trade deficit of $52.73 billion, giving the country a ranking of 186 out of the 190 countries tracked by the CIA in The World Factbook.
What Does Your Economy Export?
Brazil exports transport equipment, iron ore, soybeans, footwear, coffee, and autos.
According to the World Trade Organization (WTO). Brazil exports $153 billion in goods and merchandise compared to only $26.2 billion in commercial services. The WTO breaks down those exports as follows:
Goods and Merchandise
- Agricultural products: 37.7 percent
- Fuels and mining products: 21.3 percent
- Manufactures: 38.0 percent
Commercial Services
- Transportation: 15.4 percent
- Travel: 20.2 percent
- Other commercial services: 64.4 percent
To Whom Does Your Economy Export?
The WTO ranks the following countries as the top destinations for exports from Brazil:
- European Union: 22.3 percent
- China: 13.2 percent
- United States: 10.3 percent
- Argentina: 8.4 percent
- Japan: 2.8 percent
What Does Your Economy Import?
Brazil imports machinery, electrical equipment, transport equipment, chemical products, oil, automotive parts, and electronics.
According to the WTO, the country imports $133.7 billion in goods and merchandise compared to only $44.1 billion in commercial services. The WTO breaks down those imports as follows:
Goods and Merchandise
- Agricultural products: 6.4 percent
- Fuels and mining products: 17.6 percent
- Manufactures: 75.9 percent
Commercial Services
- Transportation: 18.1 percent
- Travel: 24.7 percent
- Other commercial services: 57.2 percent
From Whom Does Your Economy Import?
The WTO ranks the following countries as the top sources of imports to Brazil:
- European Union: 22.9 percent
- United States: 15.8 percent
- China: 12.5 percent
- Argentina: 8.8 percent
- Japan: 4.2 percent
Do You Have an Attractive Government Debt Market?
Brazil currently has a Moody’s rating of Baa2. It received this latest rating on September 22, 2009. This most recent rating was an upgrade from the Baa3 rating that the country had held previously. This is a positive sign for the country’s government debt market.
Do You Have an Attractive Equities Market?
Brazil has an attractive equities market. It is the fifteenth largest equities market in the world, with a total market value of $1.167 trillion.
Central Bank Mandate
The strategic planning of the Banco Central do Brasil (Central Bank of Brazil) aims to ensure the stability of the currency’s purchasing power and a solid and efficient financial system.
The Central Bank of Brazil has foreign currency reserves of $275,968 million and gold deposits of $1,495 million.
Government Intervention in Forex
The Brazilian government has been known to intervene in the currency market from time to time.
Important Economic Announcements
When you are watching the economic announcements coming out of Brazil, make sure that you keep your eye on the following:
- Interest rates
- Employment
- Inflation
- Gross domestic product (GDP)
- Trade balance
Are You a Safe-Haven Currency?
No, the Brazilian real is not considered to be a safe-haven currency.
How Can I Trade You?
You can trade the Brazilian real using any of the following:
- Forex futures
- Exchange-traded funds (ETFs)
- Spot Forex options
- Spot Forex
