Currency Hedge Promotion

The Currency Hedge Promotion Credit Sub-line aims to create conditions for financial institutions operating in the Brazilian market to innovate and develop products that enable currency hedging operations — most notably, currency coverage instruments such as currency call options. 

In practical terms, financial institutions that develop sustainable swap and options products for currency coverage in the local market and become accredited to operate derivatives with the Central Bank of Brazil will be able to access the credit line, invest the proceeds, and use the interest rate differential to build reserves that will serve as financial collateral against the counterparty risk they assume when offering such products under more attractive terms.