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EXCHANGE RATES AND ITS IMPACTS ON BRAZIL 4 In conclusion, businesses that extend sales to international platforms rely on the foreign exchange rates to determine the external revenues received against the value of the local currency. A rise in inflation leads to a fall in the value of the local currency against those of other countries. For Embraer, appreciation of the Brazilian Rael against the dollar had its advantages and disadvantages. The company experienced a decline in the foreign purchases, which boosted buying raw materials, however, less revenues were realized after conversion of the dollars into Real. Other risks in foreign exchange rates include the unstable currency changes due to unprecedented economic performance. When the economy plunges into inflation, revenues in Embraer reduce. To control the unknown trend of inflation impact, Embraer should plan before signing contracts forwards, or operate with spot exchanges.
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EXCHANGE RATES AND ITS IMPACTS ON BRAZIL 5 References Baer, W., & Love, J. L. (2017). Brazil’s EMBRAER: Institutional entrepreneurship. In Brazil’s Economy (pp. 119-135). Routledge. Hill, C.W. (1993). International Business: Competing in the Global Marketplace.
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  • Fall '19
  • Exchange Rate, Foreign exchange market, United States dollar

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