You are the CEO of Partido Switch Plc, which is a multinational corporation, incorporated in the US but invests in many emerging countries including Brazil. Brazil used to have a fixed exchange regime regarding its currency (Before the year 1999). However, Brazil moved to adopt a free float exchange rate regime as from January 1999.

a) Discuss the motives of Brazil’s move and its implications on the country’s economy after the change.

b) What strategy should you employ in order to manage the exchange rate exposure resulting from the change in the currency regime?.