Andréia Polizeli

The purpose of the present work was to analyze the dynamic behavior of the real exchange rate in Brazil from 1980 to 1999, with the objective of verifying the probability of valorization and devaluation of the real currency, as well as identifying the macroeconomic foundations that influence the deviations of the exchange rate from its possible equilibrium value. For that, a theoretical discussion on the definitions of the most used real exchange rate, on the existence of a equilibrium exchange rate, and on the Purchasing Power Parity theory, were initially accomplished. Following, based on models of determination of the exchange rate, it was characterized in a theoretical model, some of the economic foundations that can explain the oscillating behavior of the real exchange rate throughout the studied period. Finally, to estimate the proposed theoretical model and, thus, test the probability of the real exchange rate undergo a deviation, and in which direction, the Logit and Probit econometric models were used, choosing the estimates presented by the first. Considering that, it was verified that the macroeconomic foundations, Gross Domestic Product, Degree of Economy Openness, and the Balance of Capital Account presented positive coefficients, indicating that the predominant effect of such variables on the direction of the exchange rate throughout the series was of devaluation. On the other hand, the Trade Balance, and the Real Interest Rate presented negative coefficients, showing that the predominant effect of the variables on the real exchange rate was of valorization. Thus, it was observed that the adopted foundations presented a high explanation power about the probability of oscillation on the real exchange rate, evidencing that the developed model was consistent in foreseeing the direction of the movements of the real exchange rate in 83,15%.