Brazil is today more resilient to face external turbulence, despite the significant growth in its debt in US dollar in 2014. The reason for the resilience, according to the IMF, is that the majority of the short-term debt is hedged. This is an undebatable advantage but that also brings a concern: the Real did not devalue as much as it should, according to the country fundamentals, at least not until December of 2014. The extension of the exchange swap program in June 2014, created by the central bank in August 2013, is partly responsible for this. For the IMF, taking into consideration the domestic inflation and the inflation of its commercial partners, the Brazilian currency still needs to depreciate 5% to 15%.
The IMF considers the swap program was a success is its objective of reducing the extreme volatility caused by external turbulence. The program was created after the exchange market suffered strong oscillations, after the then FED president, Ben Bernanke, suggested it was time to interrupt the financial support in the US economy. The swap program has reduced the Real volatility in 13% to 15% in comparison to other currencies that followed the instability after the announcement by Bernanke. The IMF economists note, however, that the reduction in volatility was also due to other instruments adopted by the country, like the end of the IOF over derivatives and the increase in the interest rate, SELIC.