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THE EXCHANGE RATE
Click the next link to see the current exchange rate of Real versus dollar.

Compared to other countries, Brazil is cheap.
Update 2006. For the past three years, the dollar has gone only down against the Real. Since the beginning of 2006, the dollar has been under R$ 2.30. This means that, for foreign visitors who come with dollars or euros, prices in Brazil became more expensive recently.

Read more about the recent trends of dollar versus Real, or check out the site of Banco Central do Brasil.

Traveller cheques have a slightly lower rate than cash. Until 1999, the rate was artificially kept at US$1 = R$1 by the government, in an (successful) attempt to control inflation; inflation for year 2005 is forecasted to something around 5.5%.
The minimum wage in Brazil in 2005 (there is a readjustment once a year) is R$300, or about US$100 per month; the vast majority of Brazilian workers is paid less than 2 minimum wages per month; this alone would explain why prices must be low.

Although prices are lower all around, the effect of some macro economic laws may be observed.

First, there are geographical differences. In the more developed southern states, like Sao Paulo, the educational levels are higher, which leads to more productiviy and higher salaries, which in turn cause the prices to be higher than in the poorer northern states. An often mentioned example is the cost of private education and private health care, which are way more exepensive in the south.
Tourists would only feel the differences if travelling around the country, and even so, those wouldn't be so noticeable.

Then, there is a influence caused by the tradeability of goods or services.
Goods and/or services which use primarily Brazilian raw materials and Brazilian work force tend to be cheaper; a maid who cleans, washes and cooks, sleep in, costs a minimum wage per month; a good meal is about US$5 per person; a basic Brazilian car goes for about US$6K.
When international factors have influence on prices, these tend to go up. An air ticket from Rio to Manaus and return is as expensive as a trip from Rio to Miami, because of fuel prices; gasoline costs about US$.80 per liter, or US$3 per US gallon; phone and electricity bills are comparable to those in developed countries.

Real estate prices are completely determined by supply and demand. In the city of Rio de Janeiro, where there are very few empty space left, prices for a double room in a middle class neighbourhood start at around US$ 100k; if you find it cheap, think about buying a four roomed by the sea in Fortaleza for about the same price.
See also: Real Estate for sale in Natal and Rio Grande do Norte.

For tourists, Brazil is cheap.
Shop around to get a good price for tickets and logding.
Once you get here, food is cheap; services are cheap; having fun is cheap; buying memories is cheap.
Enjoy Brazil!

Some prices of interest:
Internet connection: R$3 - 5 per hour
Beer: R$ 2 - 3 per 600 ml bootle; R$ 1 - 2 per 350 ml can
Taxi: R$ 3 - 6 per km
Big mac: R$ 4 - 5; a comparable local sandwich goes for about half that price
A giant pizza: R$ 20 - 30
A cinema ticket: R$ 5 - 15
Packet of cigarettes (20 pieces, king size): from as low as R$1 (local brands) to about R$4 (international brands)




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