The effects of exchange policy on public finances

Vol. 13 No. 1 (1993)

Jan-Mar / 1993
Published January 1, 1993
PDF-Portuguese (Português (Brasil))
PDF-Portuguese (Português (Brasil))

How to Cite

Nabão, Márcia. 1993. “The Effects of Exchange Policy on Public Finances”. Brazilian Journal of Political Economy 13 (1):39-54.

The effects of exchange policy on public finances

Márcia Nabão
Do Departamento Econômico do Banco Central do Brasil, Brasília/DF, Brasil.
Brazilian Journal of Political Economy, Vol. 13 No. 1 (1993), Jan-Mar / 1993, Pages 39-54


The study measures the direct effect of exchange policy on public finances in Brazil in the period 1985-1988. With the aim of measuring exchange policy effects, the change of real exchange rate vis-à-vis the american dollar will be used. The compilation of all public revenues and expenditures, affected by exchange rate changes, as well as their consolidation, was performed. For this purpose, thc public sector balance of payments was drawn from actual data and, in their absence, from estimates. The survey concludes that the relationship between the Brazilian public sector and external sector, governed by the high external indebtedness determines a negative direct impact response of thc public sector fiscal deficit to a real depreciation of the foreign ex-change rate.

JEL Classification: F31; H62.

Keywords: Public debt exchange rate