About the Brazilian Real
The Brazilian real is the currency of Brazil, issued by the Banco Central do Brasil. It was introduced in 1994 under the Plano Real, which ended years of very high inflation, and it has floated freely since January 1999.
Brazilian interest rates are among the highest of any large economy, which attracts carry trades and makes the real sensitive to global risk appetite. Brazil exports soybeans, iron ore, oil and coffee, so commodity prices matter too.
The central bank's Monetary Policy Committee, Copom, sets the Selic rate eight times a year, with an inflation target of 3%. The real is not freely traded outside Brazil, and offshore hedging uses non-deliverable forwards.
Paying in BRL
- Account details and tax ID
- A Brazilian account is identified by a bank code, a branch (agência) and an account number, and payments also need the recipient's CPF (individuals) or CNPJ (companies) tax number. Brazil has used IBANs for international payments since 2013; a Brazilian IBAN starts BR and is 29 characters long.
- Exchange contracts
- Every conversion between reais and foreign currency in Brazil is made under a formal exchange contract registered with the central bank, with the purpose of the payment. The recipient's bank does this when the funds arrive, and may ask them for documents.
- IOF tax
- Brazil charges IOF, a tax on financial transactions, on most foreign exchange conversions. The rate depends on the type of transaction, so the amount the recipient receives can be lower than expected.
- Pix
- Inside Brazil, most payments now go through Pix, the central bank's instant payment system, which runs 24 hours a day and can use a tax number, phone number or email as the key.
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