Fixed-Rate U.S. Dollar Index for Out-of-Scope CPR Trades

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Grater security and predictability for investors trading CPRs with exchange rate risk exposure

In transactions involving Rural Product Notes (CPRs) settled outside B3’s scope, especially those indexed to the U.S. Dollar, exchange rate fluctuations over time can create distortions in financial calculations and discrepancies at the time of settlement. To minimize these distortions, B3 developed a Fixed-Rate U.S. Dollar Index for trading with these assets.

The solution offers greater accuracy to calculations and predictability to CPRs with exchange rate risk exposure. In this model, the transaction price is expressed in Brazilian Reals and the U.S. Dollar exchange rate is fixed at the beginning of the transaction. At the time of settlement, the value is automatically converted to Reals at the day's exchange rate, without the need to apply additional exchange rate adjustments.

With this, market participants will have a more robust and efficient structure that reduces discrepancies, streamlines the operational process and increases confidence in projected and settled values. The solution was designed specifically for higher volume trades, providing greater security, control and consistency from start to finish.

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Product benefits

Predictability

The exchange rate is fixed at the beginning of the transaction, reducing unexpected impacts over time.

Accuracy

Interest rate and accrual accounting adjustment are calculated in U.S. Dollars, avoiding distortions in higher volume trades.

Reduction of discrepancies

Greater consistency between projected and settled values, reducing rework and adjustments.

Operational efficiency

Eliminates the need for manual exchange rate adjustments and simplifies the transaction structure.

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New fixed-rate U.S. Dollar index ensures a model more aligned with the economic logic of CPRs with external settlement.

Dollar lock-in at the time of trading: the exchange rate is fixed at the beginning of the transaction, providing financial predictability.

Internal calculation in U.S. Dollars: interest rate and accrual adjustment are calculated in U.S. Dollars, avoiding exchange rate distortions over time.
Simple input in Brazilian Reals: the transaction price is entered in Brazilian Reais, without impacting usability.
Automatic settlement in Brazilian Reals: the final value is converted using the U. S. Dollar exchange rate on the day of payment.
Eliminates the need for manual exchange rate adjustments and additional parameterizations.
Suitable for CPRs outside B3’s scope: especially efficient in high volume trades.

The main instrument for financing the Brazilian agribusiness supply chain, CPR is a bond representing a promise of future delivery of agricultural products and can be issued by rural producers or their associations, including cooperatives. Learn more.