Invoice Currency in Brazil

Abstract

The article describes the invoice currency choice in the Brazilian foreign trade, focusing on the use of the Brazilian real (BRL). The Ministry of Foreign Trade (MDIC) database is used for the first time for this purpose. Even with the US dollar being far more used in Brazil than in other countries, the BRL use for denominating trade has had exceptional growth. We categorically move away from the idea that the BRL is not used in Brazilian international trade. Brazilian imports show a strong tendency toward being more invoiced in noninternational currencies than exports. Brazilian trade evidence does not confirm some previous international findings. Although they are homogenous products, sugar and tobacco are the two main exports denominated in BRL. BRL use as invoice currency and as payment currency does not match.

Keywords: international trade, Brazilian real use, currency denomination, currency invoicing

JEL Classification: F14, F39, F20, E58, E42, F13, D23