Embraer and the brazilian real

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Embraer and the Brazilian Real

This case describes the efforts by Brazilian aircraft maker Embraer to limit the impact of changing exchange rates on its revenues. Embraer is exposed to exchange rate fluctuations because the company prices its aircraft in U.S. dollars and then translates its revenues back into Brazilian reals. The company was negatively impacted in the mid-2002s by the appreciation of the real versus the dollar and later when efforts to minimize its exposure were foiled by the 2008 global financial crisis.

QUESTION: Brazilian aircraft maker Embraer has been negatively impacted not only by its exposure to changing exchange rates, but also by its attempts to limit its exposure through the use of forward contracts. What options other than forward contracts might Embraer have used to limit its foreign exchange rate exposure?

Reference no: EM131465044

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