RIO DE JANEIRO, BRAZIL - The Brazilian Central Bank (BC) can use up to US$ 120 billion to act on the exchange rate when it deems necessary and still keep international reserves at an adequate level. The calculation is made by Bráulio Borges, senior economist at LCA Consultores, based on the ARA methodology (Assessing Reserve Adequacy).
A methodology used by the International Monetary Fund (IMF) to compare countries' reserves with their financial obligations abroad, ARA establishes that the adequate level of reserves is between 1 and 1.5, on its own scale. Brazil ended last year with US$ 356 billion . . .