How the exchange rate works

An exchange rate is simply the price of one currency in another. When the dollar is quoted at R$5.50, it takes R$5.50 to buy US$1. That price changes all day long, driven by:

• Supply and demand for dollars.
• Interest rates in Brazil and the US.
• International trade flows.
• Foreign investment.
• Economic and political events.

Just like stocks have a market price, so do currencies.

Contrary to what many assume, the Central Bank does not set the daily price of the dollar. The rate is formed by the market: banks, brokerages, exporters, importers, funds and companies trade dollars continuously, and the market rate emerges from those transactions. The Central Bank can intervene by buying or selling dollars, but it does not fix the price.

There are three references every Brazilian should know.
Commercial dollar. The rate used in large financial and corporate operations, and usually the one shown on Google, Bloomberg, Reuters and financial portals. When someone says the dollar is at R$5.50, they usually mean the commercial rate.
Tourist dollar. The retail rate, for buying cash, international cards and exchange houses. It is usually more expensive because it builds in extra margins and operating costs.
PTAX. The official reference rate calculated and published daily by the Central Bank, an average of the rates collected through the day. It is widely used in financial contracts, tax calculations, accounting statements and regulatory references. Important: you normally do not buy or sell dollars exactly at PTAX.

This is probably the most common question. Imagine the commercial dollar at R$5.50; your bank might offer R$5.70. The difference usually comes from two things.
1. FX spread. The margin charged by the institution, the gap between the market rate and the rate offered to you. In the example, the commercial R$5.50 against the offered R$5.70 is an effective spread of R$0.20 per dollar. Depending on the institution, it can be a large share of the total cost.
2. IOF. Many FX operations also carry IOF, and the impact varies by operation type. That is why the final cost can land well above the rate shown in the market.

Imagine converting US$10,000. If the commercial rate is R$5.50 and the bank uses R$5.70:

• Difference per dollar: R$0.20.
• Extra cost: R$2,000.

Often the spread costs more than the explicit fees the institution charges. More in FX spread, explained.

The main factors include:
Interest rates. When Brazilian rates rise, real-denominated assets can become more attractive to international investors.
The US economy. US economic data directly influences global demand for dollars.
Trade flows. Exports and imports affect the supply of and demand for the currency.
The global picture. Periods of uncertainty usually increase demand for the dollar as a safe haven.

For most people and businesses, the best reference is the commercial dollar. But watching the rate alone is not enough. What matters is the total cost of the operation:

• Market rate.
• Spread applied.
• IOF.
• Extra fees.

Ruvo uses the market rate as its reference and applies a transparent fee. Instead of the wide margins typical of retail, it keeps the rate close to the commercial reference, which makes it easy to compare the figure shown in the media with what you actually receive. Converting reais into digital dollars is 0.5%, with 0% IOF. Ruvo also connects several financial rails to cut the need for traditional intermediaries and their costs:

• ACH.
• RTP.
• Pix.
• Stablecoins.

The dollar rate you see on Google is only the starting point. What you actually pay or receive depends on the spread, the taxes and the fees each institution applies. That is why understanding how the exchange rate works is the first step to saving when you receive, convert or move dollars. For the income-tax side of dollar earnings, see the 2026 tax table for dollar earners.