Spot exchange rate risks is Embraer is exposed to the foreign exchange risk.

It is when

the two parties agree to exchange currency and execute the deal immediately. In this case,

receivables from the sale of its jets and payables for the purchase of jet manufacturing parts are

directly affected by currency exchange rates. Embraer can reduce translation risk by hedging its

domestic currency against a strong foreign currency. Because of the constant currency rate

variations between the Brazilian real and the US dollar, Embraer is exposed to this foreign

exchange rate risk. Reducing foreign exchange rate risks by evading the weak Brazilian real

against the strong US dollar, thereby mitigating the effects of the Brazilian real's depreciation.