Exchanging money with an expat

Question

I'm a EU citizen living in Brazil. My salary is paid to a Brazilian bank account in Reais (the local currency). I still have a loan my bank in the EU, so I have to transfer some money to them every month. To avoid exchange rate fees and bureaucracy, I found an expat that is now living in Brazil, but is paid with Euros to his bank account in the EU.

So the win/win situation is for me to transfer Reais to his bank account in Brazil using my Brazilian account, and for him to wire me Euro from his EU bank account to my EU bank account.

We are exchanging around 1000-1500 Euros every month. I have to pay back a bit less than 1000 Euros on the loan.

My question is: Is it legal to do that, or can I be in trouble at some point? I tried Google but it's hard to find the correct wording and so far didn't find anything related to my situation.

The loan will be paid back at the beginning of next year and then I'll transfer those 1500 Euros as savings, in case the economy shifts in Brazil. That way I don't have all my eggs in the same basket.

Answer 1

There's nothing illegal about exchanging money with a friend. Similar arrangements can be used for money laundering which is illegal, but these are often more complex - and your arrangement is rather simple, above board, regular, and traceable.

Not related to the legality at all, I would just make sure that you are both getting a decent exchange rate, and that you keep an eye on exchange rate fluctuations so that one of you doesn't benefit from the other's loss. You're saving on fees because the situation is beneficial to both of you, but obviously, those savings shouldn't extend to getting a "better" rate than the market, because then one of you would be losing.

Also in regards to legalities, IANAL/TINLA.