Behavior of the monetary base and its conditioning factors in Brazil between January 1992 and March 1996

ABSTRACT This paper studies the behavior of the monetary base and its proximate determinants in Brazil between January of 1992 and March of 1996. To achieve this, the paper analyzes monthly variations of the base, using correlation coefficients and the relative participation of each determinant on total variation. The analysis demonstrates that there are several specific differences before and after the Real Plan in the profile of the determinants. However, the analysis also shows that in both periods one of the major determinants of the monetary base is the net flow of foreign exchange to Brazil.