Company: BBD
Filing Date: 2025-03-31
Form Type: 20-F
Source: 0001292814-25-001244
Chunk: 44

Company: BANK BRADESCO
Filing Date: 2025-03-31
Form: 20-F
Item: Item 3
Chunk 44
---
 2021 because of the increased global aversion to risk, due to the COVID-19 pandemic. Weaker currency periods make certain local manufacturers (particularly exporters) more competitive, but also make managing economic policy, particularly inflation, increasingly difficult, even with a decelerated growth. A weaker real also adversely impacts companies based in Brazil with debt indexed to and/or denominated in foreign currency.
 In 2023, the real/U.S. dollar exchange rate fluctuated around R$/U.S.$5.25 and the real appreciated towards the end of the year to R$/U.S.$4.84 in 2023. A strong trade balance and robust external accounts, as well as economic growth at a strong pace, contributed to this appreciation during 2023. However, in 2024, global movements strengthened the dollar, along with growing concerns in relation to the sustainability of Brazil’s public finances led to a sharp depreciation of the real, which ended 2024 at R$/U.S.$6.19. The change of the primary surplus target for 2025 and the increase in compulsory expenditures beyond the limits set by the current fiscal framework raised questions about the long-term viability of public debt. In addition, the deterioration of the current account deficit, driven by increasing domestic demand, was another factor that contributed to the devaluation of the real against the U.S. dollar of 27.9% in 2024.
 If the Brazilian currency devalues or depreciates, we may incur losses on our monetary liabilities denominated in, or indexed to, foreign currencies, such as our long-term debt denominated in U.S. dollars and loans in foreign currency and may experience gains on our monetary assets denominated in or indexed to foreign currencies, since these liabilities and assets are converted into reais using the foreign exchange rate at the reporting date. Consequently, if our monetary liabilities denominated in, or indexed to, foreign currencies significantly exceed our monetary assets denominated in or indexed to foreign currencies, including any financial instruments entered into for hedging purposes, a large devaluation or depreciation of the Brazilian currency could significantly and adversely affect our operating results, and the market value of our shares and ADSs, even if the value of the monetary assets and liabilities has not changed in their original currency.
 If the Brazilian currency appreciates, we may incur losses on our monetary assets denominated in, or indexed to, foreign currencies, such as the U.S. dollar, and we may experience reductions in our monetary assets or liabilities denominated in or indexed