Eco Invest Brasil - Promoting Foreign Exchange Derivatives

Eco Invest Brasil is a programme of Brazil’s Ministry of Finance under the Ecological Transformation Plan, created to unlock sustainable private investment and attract foreign capital for long-term investments. This is a credit line to promote foreign exchange derivatives. Many Brazilian companies need to protect themselves from exchange rate fluctuations, but they may not always find good options in the market. The credit line encourages financial institutions to offer more affordable currency hedging, such as insurance and currency swaps. The line aims to create conditions for financial institutions operating in the Brazilian market to innovate and develop products that enable foreign exchange hedging, and in particular currency cover such as currency call options. Financial institutions that develop sustainable swap and option products for currency cover in the local market, and are accredited to trade derivatives with the Central Bank of Brazil, can take up the credit line and invest the funds. They use the rate differential to build reserves, which serve as financial collateral against the counterparty risk they take on when offering these products on more attractive terms. As a result, more companies will be able to protect themselves against exchange rate fluctuations, which facilitates financial planning and makes Brazil a more reliable destination for international investments.

No

Program in development (not yet operational)