The aim of this paper is to assess the exchange rate arrangement adopted in Brazil since January 1999. We use indicators of the Calvo-Reinhart type to evaluate if the monetary authorities in this country show fear of floating as compared to the cases of a number of other emerging economies as well as developed economies. Our results indicate that the Brazilian authorities intervene more intensively in the foreign exchange market than free floaters do. On the other hand, we can show, through an analysis period by period, that in the absence of strong external shocks, the Brazilian exchange rate arrangement looks like a pure floating one. Moreover, the empirical evidence suggests that monetary authorities seems to be more concerned about a large misalignment of the real exchange rate, than about volatility.
exchange rate arrangements; floating exchange rate; fear of floating; Brazilian exchange rate regime
