Abstract：Brazilian Central Bank (BCB) introduced DNDFs (Domestic-Non-Deliverable Forwards) as auxiliary tools to intervene in FX market since 2002, and used it as main daily intervention measures since 2013. The DNDFs are fundamentally a kind of so-called“FX swaps”, with the same mechanism as swap, and can increase domestic foreign currency interest rate directly. The advantage of this instrument is that it can be net settled in BRL, and don’t necessarily put pressure on money supply as well as foreign currency reserve amount. While there are some limits to intervention through DNDFs. One near term constraint may be the willingness of commercial banks to increase their near-arbitrage positions across different instruments and across borders. A long term constraint is that the effectiveness of the operation is sometimes subject to the convertibility risk. Most importantly, the DNDFs can’t manage exchange rate expectations directly. BCB’s DNDFs operations benefit from the unique market structures, in which the liquidity in FX forward market is much better than that in spot market. So this kind of instrument can’t be easily copied by other countries. PBC has taken some relative measures in the FX market recently, which played similar roles to DNDFs. We suggest to continue taking actions in the future to raise interest rate of domestic dollar, in order to encourage market participants to fund from offshore market and enlarge capital inflows.