Commercial and Tourism Dollar: Understand the Differences

Discover once and for all the difference between commercial and tourist dollars!

A American currency It is the most used for international financial transactions, and negotiation is governed by two categories: commercial and tourist dollars.

If you intend to travel outside of Brazil or carry out financial transactions involving dollars, you need to know the difference between the two categories.

With this in mind, we have prepared an article with the main information about the commercial and tourism dollar.

To learn more, continue reading.

Commercial and tourism dollar: why is there a difference in the exchange rate?

If you are traveling abroad, you need to pay attention to the exchange rate of the tourist dollar, which generally has an exchange rate slightly above the commercial dollar.

In other words, the tourist dollar is more expensive.

This is because administrative and financial costs must be taken into account. Furthermore, individuals purchase smaller volumes than companies and banks.

It is also important to mention the brokers’ transaction fees.

What is commercial dollar?

Commercial dollar is the dollar exchange rate used as a reference in foreign trade negotiations.

If a company or government intends to import or export products, there must be a common currency between the parties involved in the transaction.

The commercial dollar is traded by companies, institutions and the government. In fact, since the volume of transactions is very large, it is usually cheaper than the tourist dollar.

In this way, buyers and sellers use the commercial dollar for negotiations.

The price is set daily according to supply and demand.

What is the tourism dollar?

Tourist dollar is the physical currency, traded in exchange bureaus and currency correspondents.

It represents the currency rate for individuals who will use the dollar on international trips or to purchase products and services, such as airline tickets or items on international websites, for example.

The quote is based on the cost of the commercial currency, but with the addition of the Tax on Financial Transactions (IOF).

What is a parallel dollar?

The parallel dollar is basically the dollar exchange rate outside of legal means.

It is used by money changers and exchange houses not authorized by the Central Bank (BC).

This type of operation still occurs on the black market. However, we are talking about something completely illegal, that is, the operation is subject to punishments provided for by law.

An unsuspecting buyer may have problems with the law, in addition to having no guarantee whatsoever in the purchase and sale transactions.

How does the dollar exchange rate work?

The dollar is the official currency of the United States, the world's largest economy.

For this reason, most international transactions around the world are carried out in dollars.

Any fluctuation in the American economy can have a favorable or unfavorable effect on the currency exchange rate in different countries.

In fact, as you already know, the dollar exchange rate varies according to supply and demand.

For example, when there is a greater circulation of dollars within a country, such as Brazil, it means that the supply is high and the price of the dollar tends to fall.

If, on the other hand, there is little availability, the price tends to rise.

What are the factors that make the dollar rise or fall?

There are some factors that should be closely monitored in order to have greater predictability of the currency's value.

To help you understand this, we have put together a list of the main factors that influence the rise or fall of the dollar. Take a look:

Floating exchange rate

Floating exchange rate is an exchange rate regime in which the purchase and sale operations of a given currency are defined according to supply and demand, without intervention from the Central Bank.

It is a way for countries to balance the exchange of their national currency with other currencies.

The floating exchange rate has been the Brazilian exchange rate regime since 1999.

Foreign exchange reserves

Foreign exchange reserves are the foreign currencies and gold accumulated by a country.

They are essential for international negotiations made in dollars.

Economy of the US and other countries

The United States has one of the strongest economies in the world.

This means that in practice, everything that happens in the country directly or indirectly impacts the dollar exchange rate.

How can the rise of the dollar impact the lives of Brazilians?

The rise or fall of the dollar is a recurring topic in the news.

However, it is not always evident how much this variation impacts the lives of Brazilians.

In fact, many people think that the dollar exchange rate only affects those who are traveling abroad. In fact, this is not the case.

The rise of the dollar in relation to the real affects simpler things, like the price of bread.

Wheat, a basic input for the production of bread and other products, is imported. In other words, the appreciation of the dollar makes the price of bread and these other products more expensive for the end consumer.

The price of gasoline is also influenced by the dollar, as the value changes according to the variation in the international price of a barrel of oil and the variation in the dollar.

Why is the dollar falling?

Even amid the war in Ukraine and rising interest rates in the United States, the dollar has begun to fall in recent weeks.

Normally, these two factors would cause the real to depreciate further, due to uncertainty and the attraction of resources to the US economy.

The increase in the Selic rate, Rising commodities and the outflow of investments from Russia to other emerging markets are the factors that explain the fall of the dollar in this scenario.

Conclusion

The commercial and tourist dollars have different exchange rates and only companies, institutions and governments can buy the commercial dollar.

We hope that with this article, you have understood the difference between these two categories and how much the rise or fall of the dollar can impact the lives of Brazilians.