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We are exposed to market risk from changes in both foreign
currency exchange rates and interest rates. We are exposed
to foreign exchange rate risk because certain of our costs
are denominated in currencies (primarily the U.S. dollar)
other than those in which we earn revenues (primarily the
real).
Similarly, we are subject to market risk deriving from changes
in interest rates which may affect the cost of our financing.
As discussed in note 24 of the consolidated financial statements,
we use derivative instruments to manage risks and reduce our
exposure resulting from fluctuations in currency exchange
rates. However, we do not cover entirely our exposure to the
currency exchange rate fluctuation risks through the use of
such derivative instruments.
There can be no assurance that we will continue using such
instruments in the future to manage these risks.
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