With the devaluation of the real (R$), Brazilian remittances from abroad set record

RIO DE JANEIRO, BRAZIL – Roberlei Cardoso, after retiring as a sales representative in Cascavel (PR) in 2015, went to London to work in the real estate sector. He and his wife, Leila Previati, who works in a restaurant in the British capital, have always considered their financial life successful in the land of the pound. But recently, they are striving to save every penny – or penny.

The reason? To send as much as possible to invest in Brazil, taking advantage of the strength of the pound against the real to pave the way for a comfortable return to the country.

Just like them, other expatriates are sending more funds to Brazil, to buy real estate and invest in businesses, seeing that the money they earn abroad is worth more here with the strong and prolonged devaluation of the real.

According to data from the Central Bank (BC), remittances from abroad set a record in the first half of this year, totaling US$1.9 billion, equivalent to R$10.16 billion.

It is the highest value of the BC’s historical series, which began in 2010, and an increase of 24% compared to the same period in 2020 and 36.5% compared to 2019 when the pandemic was not even thought of.

“When the pound was worth R$5 between 2018 and 2019, it was already very good. But when it started to reach almost R$8, it was the moment to send everything we had to Brazil,” says Cardoso, 58, who has been buying real estate in Brazil with the advantages of those who earn in a currency that ended last week at R$7.33, having reached R$7.93 in March.

“The goal is, when we return to Brazil, to have a standard of living a little better than here. Buying real estate is the way to have support when old age comes.”

THE WEAK REAL

Converting the amount sent by Brazilians abroad in the first half of the year, the little more than R$10 billion is equivalent to the budget for three months of the Bolsa Família and the emergency aid, which helped to reduce the impact of the pandemic on the economy.

Since 2004 in England, immigration lawyer Tiago Soares, from Ashton Ross Law, says that remittances to Brazil usually increase when the Real is devalued, but now the movement is more intense: “nobody imagined that the exchange rate would stay so high for so long.”

The data from the Central Bank pointed out records between January and June in sending resources from three countries that have large Brazilian communities: USA (US$946 million), United Kingdom (US$370.4 million), and Canada (US$27.9 million).

From Portugal, another popular destination among Brazilian immigrants, came US$101.3 million, in the sixth consecutive semester with remittances over US$100 million.

For Julia Braga, professor at the Economics School of the Fluminense Federal University (UFF), this phenomenon is due to several factors. The first is the economic crisis caused by the pandemic, which knocked down the income of many families in Brazil and encouraged immigrants to send more money to their relatives.

The second is the devaluation of the Real, which generates investment opportunities here for those who are abroad. Julia also mentions the lack of economic perspectives in Brazil, which encourages more people to leave:

“There is this volume of people who left in search of new opportunities who, when they get income, start sending more resources to invest or help relatives in Brazil. I see the Brazilian crisis as an important factor.”

Besides the real estate market, other investments in Brazil attract the expatriates’ money. Lúcio Santana, who works with real estate financing in Deerfield Beach, Florida, says that he has just bought 50% of a school in Campo Limpo Paulista (SP), where he lived before moving to the USA 23 years ago.

He has no plans to return to live in Brazil but saw the strengthening of the dollar against the real as an opportunity to invest in the education business in his homeland. The American currency went up again and closed last week at R$5.38.

“I am not thinking of going back, but I have always dreamed of having a business in Brazil. This investment can make a difference in my city,” says Santana.

IT IS EASIER TO HELP

The bricklayer Sílvio Ramos de Melo, 52 years old, also doesn’t think about going back to the country since he settled in Cascais, Portugal. Although he gives priority to his savings to have more tranquility in the new life in Europe, with the euro around R$6.30 he has been able to send money to fellow countrymen in difficulty in Brazil:

“Sometimes a brother, a relative or a friend asks for help, asks for R$1,000. Before, I needed almost 250 euros to get by. Today, I send €150. It is a day of work for me here, which is worth more than a week for the people who stayed in Brazil – says Melo, a native of Teresópolis (RJ).

José Ribeiro, owner of Prima Transfer, in London, serves mostly Brazilians who want to send money to their homeland. He says that the demand has increased a lot since last year to buy real estate and make other investments in Brazil, not only because of the exchange rate advantage: “since the country is in crisis, business opportunities increase.”

Adilson Goes, who swapped São Paulo for Boca Raton, in the US state of Florida, and works at Fair USA, another resource transfer company, also says he has seen Brazilians expatriates making dreams come true with a little push from the exchange rate: “a Brazilian who came here compared the value he had in dollars and realized he could buy a farm in Brazil, his dream. After the dollar went up more, he still sent the money to buy the cattle.”

André Linhares, an immigration lawyer in Florida, corroborates: “the kind of immigrant who is here to make ends meet and return to Brazil in the future is taking advantage of it.”

The increase in remittances generates opportunities in Brazil as well, where the receiving side of the money is. Daycoval bank has seen the use of DayPay, a service that facilitates the sending of international remittances, exceed 50% of its retail foreign exchange business. It has opened new cash receiving stores in São Paulo, Brasília, and Goiânia and plans to reach other cities.