Members geodesic Posted August 21, 2020 Members Posted August 21, 2020 (edited) Reading floridarob's and numazu's comments on how ridiculously cheap everything is in Brazil atm, got me thinking... Is there any way for a foreigner to open a Brazilian bank account and transfer a sum of money, perhaps around 50K, into it using one of those multi-currency money transfer services (eg. Transferwise)? I'm thinking this would be a good way for me to cover my expenses in my next two or three trips - I literally have nothing to lose as the interest/savings rate in the UK is virtually zero, so I wouldn't be getting any return on this money anyway. But if the Brazilian Real appreciates to 2019 levels, I'd be laughing! My cursory reading around the subject leads me to believe that, although no one has a crystal ball, the currency is devalued and will likely appreciate but this obviously depends on how quickly the Brazilian economy recovers. It would seem that the depreciation of the currency hasn't really resulted in a hike in inflation, as I observed in other LATAM countries (as floridarob and numazu would attest) Any thoughts/advice would be much appreciated! Edited August 21, 2020 by geodesic Quote
Members BrazilianBoiChaser Posted August 21, 2020 Members Posted August 21, 2020 34 minutes ago, geodesic said: Reading floridarob's and numazu's comments on how ridiculously cheap everything is in Brazil atm, got me thinking... Is there any way for a foreigner to open a Brazilian bank account and transfer a sum of money, perhaps around 50K, into it using one of those multi-currency money transfer services (eg. Transferwise)? I'm thinking this would be a good way for me to cover my expenses in my next two or three trips - I literally have nothing to lose as the interest/savings rate in the UK is virtually zero, so I wouldn't be getting any return on this money anyway. But if the Brazilian Real appreciates to 2019 levels, I'd be laughing! My cursory reading around the subject leads me to believe that, although no one has a crystal ball, the currency is devalued and will likely appreciate but this obviously depends on how quickly the Brazilian economy recovers. It would seem that the depreciation of the currency hasn't really resulted in a hike in inflation, as I observed in other LATAM countries (as floridarob and numazu would attest) Any thoughts/advice would be much appreciated! I wouldn't necessarily say that the currency is far devalued. If you look at most LATAM currencies they have steadily declined or traded sideways in value over the last decade which is a trend I personally see continuing. The political situation in LATAM in late 2020-2021 portend to possible victories by left leaning governments which generally punishes the currency as international investors flee. It is my estimation the Real will temporarily rise just like Mexican Peso but over the long-term will fall in value. Most of LATAM require a surplus of dollars to buy products in the foreign markets. The first way they draw dollars in is by keeping rates high causing investors to borrow in a foreign currency with low rates usually USD or Yen and invest in the local country pushing capital into the banking system and spurring spending and consumption (Lebanon Model). The second way by lowering rates to depreciate their currency and artificially lower the cost of exports leaving export firms flush with capital that makes it's way into the local capital markets (Most of Latin America). Most Latin American currencies are so intertwined with exports that their currencies move in lock step with the commodity they export. (Mexico peso and Colombian peso go up nearly every-time oil rises). I am very pessimistic on Brazil personally because their main exports are Oil&Gas/Ethanol (Petrobras), soy for sorghum (cattle feed), sugar(ethanol), and iron ore. The Chinese just said they are switching to US soy supplies, electrification of car (Teslas ect), and future diets that will be less meat based will long-term sink Brazil's export base. America can print it's way out of debt because most people use our currency to settle debts giving it intrinsic value no matter what despot ascends the throne of presidency but Brazil has no luxury to do that. The only thing they can do is export or tap their swap line at the FED for dollars. Quote
