Brazil establishes a currency stabilization fund to keep the exchange rate between $3 per Brazilian real and $5 per Brazilian real. Initially, the market exchange rate is within the allowed range at $4 per Brazilian real, as shown by the intersection of the demand (D1 ) and supply (S1 ) curves for the Brazilian real on the following graph. Suppose that higher coffee prices generated higher income for people in Brazil, which increased demand for foreign-made goods, in particular for the goods made in the United States. As a result, the supply of reais in the market for foreign exchange increased from S1 to S2