Highlights
- Brazilian companies can hedge dollar exposure with exchange-traded futures, over-the-counter forwards (NDFs), options and swaps.
- Dollar futures on B3 have a US$50,000 notional, monthly expirations and daily margin adjustments, according to B3’s investor education portal.
- Hedge accounting under CPC 48 requires formal designation and documentation at inception, and cash flow hedges involve highly probable forecast transactions.
- The Inter-American Development Bank (IDB) and Brazil’s Central Bank signed a November 2025 agreement for up to US$3.4 billion in long-term currency hedges.
- Brazil’s 2021 foreign exchange law limits when payment in foreign currency can be stipulated in domestic obligations.
Brazilian companies with dollar-linked revenues or costs can use several derivatives to protect cash flow from swings between the real and the U.S. dollar. The main tools are exchange-traded futures, over-the-counter forwards, options and swaps. Each carries different costs, margin demands and accounting treatment. The question matters most for long-term service and industrial supply contracts, where the market for hedges is thinner. In November 2025, the IDB and Brazil’s Central Bank announced an arrangement aimed at that gap.
Why exposure has become a governance issue
A column published by Exame on August 3, 2026 notes that the dollar rose 27.6% in 2024. By its figures, foreign-currency debt at 102 listed Brazilian companies rose from R$353 billion to an estimated R$392 billion within weeks, adding more than R$39 billion to their gross debt. The column says that amount equaled 53.2% of those companies’ consolidated third-quarter 2024 Ebit. It concludes that currency risk has moved from a treasury task to a governance topic.
The instruments
B3’s investor education portal describes the dollar future as a standardized exchange contract with a notional value of US$50,000 and monthly expirations. Participants must post collateral, which is recalculated daily as prices move. B3’s contract rules provide for a daily adjustment based on the difference between each day’s settlement price and the previous day’s. Gains and losses are therefore settled in cash every trading day.
The non-deliverable forward (NDF) is a bilateral contract with a financial institution that fixes an exchange rate for a future date and is settled financially. Exame’s column says it can match amount, maturity and counterparty exactly, and that the over-the-counter version requires no daily adjustments or cash margin deposit. Options give the buyer the right, but not the obligation, to buy or sell currency at a set price. Swaps exchange cash flows between a dollar-linked leg and a leg tied to a local index.
What protection costs
The same column details the cost of locking in the dollar. It says the roughly 11-point gap between Brazil’s Selic rate, cited at 14.75%, and the U.S. federal funds range of 3.50% to 3.75% makes a 12-month lock cost about 11% more than the spot rate. Its example is a spot dollar at R$5.00 and a one-year future near R$5.50, which it describes as arbitrage rather than a forecast. For a company with US$1 billion in dollar liabilities, it puts the annual carry of a one-year hedge at about R$500 million.
The column also contrasts trading venues. It cites bid-ask spreads of 0.01% to 0.02% of notional on B3’s most liquid dollar contract, against effective spreads of 0.20% to 0.50% on over-the-counter NDFs, sometimes higher for long maturities or small contracts. Exchange-traded futures, however, require margin. For a US$100 million exposure at a 6% to 8% margin rate, it estimates R$30 million to R$45 million tied up as collateral.
Accounting and tax treatment
CPC 48, the Brazilian counterpart of IFRS 9, took effect in 2018, according to the accounting outlet Netcpa. It recognizes three hedge categories: fair value, cash flow and net investment in a foreign operation. To qualify for hedge accounting, a relationship needs formal designation at inception, documentation of the risk management objective and strategy, and compliance with effectiveness requirements.
In a cash flow hedge, changes in the hedging instrument are recorded in equity until the hedged item is realized. A KPMG Brazil publication explains that a forecast transaction used as a hedged item must be highly probable. The Exame column adds that for tax purposes, Brazilian Federal Revenue Service rule IN RFB 1.700/2017 requires detailed documentation of hedge relationships. Without it, the column says, derivative losses may be disallowed as deductions.
Long maturities and the IDB-Central Bank arrangement
Long-dated protection is harder to find. Exame’s column says the private market offering tends to concentrate in maturities of three to five years. The IDB’s announcement addresses part of that gap. The agreement with the Central Bank enables up to US$3.4 billion in currency hedge operations, structured under International Swaps and Derivatives Association standards. It creates a dedicated currency-protection conduit. The IDB provides long-term derivatives through the Central Bank, and local banks pass them on to beneficiaries of Eco Invest Brasil.
The program is aimed at investments in areas such as renewable energy, bioeconomy, resilient infrastructure and sustainable land use. The IDB said Eco Invest has mobilized more than R$75 billion (US$13.2 billion), including R$46 billion from foreign investors. When the program was launched in 2024, Central Bank President Roberto Campos Neto said its aim was to make longer-term currency hedging easier where the market is scarce. He added that the bank takes no credit risk on the derivatives.
Risk-sharing in long contracts
Some long-term arrangements share currency risk through contract design instead. The Exame column cites a BNDES study on São Paulo highway concessions. Since 2017, the state transport regulator Artesp has used a variable concession payment of 0% to 6% of gross revenue to share currency risk with concessionaires that borrow abroad. It also says rules for federal airport concessions in Porto Alegre, Salvador, Florianópolis and Fortaleza provide currency protection capped between US$75 million and US$180 million per asset.
In Brazilian public contracts, price adjustment depends on what the agreement says. Conjur, a legal news site, reports that adjustment can be applied only when stipulated in advance, with clear indices, in the bidding notice and contract. A consultancy cited by Zênite says the answer on whether currency variation can justify changing a contract’s value also turns on whether a risk allocation matrix treated exchange rates.
Legal framework for foreign-currency pricing
Brazil’s foreign exchange law, Law 14,286/2021, took effect on December 30, 2022. Article 13 lists the situations in which payment in foreign currency can be stipulated for obligations enforceable in Brazil. They include foreign currency purchase and sale, and leases between residents funded from abroad. According to law firm Demarest, a stipulation outside the permitted cases is null and void.
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