Many of Asian nations devastated in the "Asia Crisis" had floating currencies like Malaysia.
In July, within days of the Thai baht devaluation, the Malaysian ringgit was "attacked" by speculators. The overnight rate jumped from under 8% to over 40%. This led to rating downgrades and a general sell off on the stock and currency markets. By end 1997, ratings had fallen many notches from investment grade to junk, the KLSE had lost more than 50% from above 1,200 to under 600, and the ringgit had lost 50% of its value, falling from above 2.50 to under 3.80 to the dollar.
In 1998, the output of the real economy declined plunging the country into its first recession for many years. The construction sector contracted 23.5%, manufacturing shrunk 9% and the agriculture sector 5.9%. Overall, the country's gross domestic product plunged 6.2% in 1998. During that year, the ringgit plunged below 4.7 and the KLSE fell below 270 points. - Wikipedia
Excessive foreign borrowing by Brazil will first float up the value of its currency.
Then later the unwinding will "float" the Brazilian currency value down. But the "float down" will occur like dropping a rock, just as in Asia. Sentiment changes quickly, even without fixed exchange rates.
Almost all foreign borrowing in Brazil is done by corporations, just as it was in most Asian nations - yet you keep babbling on about the Brazilian government's rules for itself as if tis is somehow relevant to this process.
In the end, Brazilians become a monkey, wearing a leash and a cute little hat, for the entertainment and income of foreign lenders.
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