CMN Resolution No. 1552 - Floating Exchange Rate Market, Travel Segment

RESOLUTION NO. 001552

THE CENTRAL BANK OF BRAZIL, in accordance with Article 9 of Law No. 4,595 of December 31, 1964, makes public that the MONETARY COUNCIL NATIONAL, in a session held on December 21, 1988, considering the provisions of Article 4, items V and XXXI, of the aforementioned Law, and Article 1 of Law No. 5,601 of August 26, 1970,

RESOLVES:

I - Financial institutions, travel agencies, and accommodation tourism intermediaries are permitted to conduct foreign exchange operations at rates freely agreed upon between the parties, under the following conditions:

a) Accreditation:

• To be specially granted by the Central Bank, which will establish, among other requirements, the minimum capital or net worth necessary;

b) Covered Operations:

• Purchase and sale of traveler's foreign exchange;

c) Limits:

1. Foreign Exchange Sale:

• In cash, "traveller's checks", or payment order: up to US$4,000.00 (four thousand United States dollars) or its equivalent in other currencies, per traveler and per trip;

• Tourist packages, as defined by the Brazilian Tourism Company - EMBRATUR: without limits;

2. Foreign Exchange Purchase:

• Without limits;

d) Restrictions:

1. Foreign Exchange Sale:

• In cash, "traveller's checks", or payment order: with mandatory identification of the buyer, subject to proof of the previous trip, with the requirement of a minimum interval waived;

• Tourist packages: permitted to companies classified by EMBRATUR, subject to proof of the effective sale of services, exclusively for payment through a bank authorized to operate in foreign exchange;

2. Foreign Exchange Purchase:

• Without mandatory identification of the seller, with the buyer assuming the commercial risk for the proper settlement of the acquired financial instrument;

e) Exchange Position:

• Accredited institutions operating in the system must register their floating rate operations in a position separate from those processed in the administered rate segment, if authorized;

• The non-bank accredited institution must elect a centralizing bank that will be responsible for registering, daily, the purchase and sale operations of the previous business day in SISBACEN;

• System operators may freely buy and sell currency among themselves;

• The purchased position may be passed on, in exchange for cruzados, to institutions abroad, with which arbitrage operations may also be conducted;

• The Central Bank may establish limits on the purchased position, per accredited institution or type of institution;

f) Operating Hours:

• Operating hours in the floating rate segment are free;

g) Brokerage:

• Broker intermediation is not mandatory in the floating rate market;

h) Foreign Currency Accounts:

• Non-bank institutions, operators of the system, may maintain, with an accredited bank, freely movable accounts in foreign currencies or fixed-term deposits, which may be remunerated exclusively in the same currency as the deposit;

• The Central Bank may authorize other natural or legal persons to maintain foreign currency accounts in the Country;

• The resources maintained in said accounts must be used by the depositary bank in financing export operations.

II - The Central Bank may, at any time, suspend the operation of the foreign exchange market segment to which this refers, alter the limits, deadlines, and conditions established in this Resolution, as well as admit other institutions to operate in the System.

III - The floating rate market will come into force after being regulated by the Central Bank, from which date the currently valid concession of exchange for travelers at administered rates will cease, canceling the provisions currently in force on the matter, including Resolutions Nos. 98, 759, 1,500, and 1,514, respectively of August 24, 1968, August 12, 1982, July 27, 1988, and September 9, 1988.

IV - The Central Bank may adopt the measures deemed necessary for the execution of this Resolution.

V - Resolution No. 1,542 of December 1, 1988, is canceled, from the date of publication of this Resolution.

Brasília-DF, December 22, 1988

Elmo de Araujo Camões
President