Brazil Central Bank drafts bill to revamp foreign exchange market

The Central Bank proposed a bill to modernize the foreign exchange market. The piece of legislation aims to “introduce a new legal framework—mode modern and concise, and legally safe for the foreign exchange and capital market in Brazil and Brazil’s overseas.”

The bill was submitted by President Jair Bolsonaro to the lower house on Monday (Oct 7). “If approved by the National Congress, the bill will enable the country’s business environment to improve, bringing simplicity and promptness to all those dealing with international operations. The bill will also allow innovative business models to be implemented with legal security, boosting competitiveness and providing more efficient services for the foreign exchange market and operations linked to foreign capital,” the Central Bank said in a note.

Changes include deposit accounts held in either reais or a foreign currency. “Such precepts help make the real part of the assets of these institutions, thus expanding the use of the national currency in negotiations overseas and simplifying the participation of international investors in securities issued directly in reais overseas,” the bill description reads.

The bill “also favors the use of the real in international business by allowing payment orders to be sent by third parties from accounts held in reais in Brazil and controlled by banks abroad,” the Central Bank adds.