Brazil’s consumer-loan default rate fell to the lowest level since November 2011 on near-record low borrowing costs.
The consumer default rate fell for a third consecutive month to 7.6 percent from 7.7 percent in February, the central bank said in a report distributed today in Brasilia. The company loan default rate fell to 3.6% from 3.7 percent.
President Dilma Rousseff’s administration has lowered reserve requirements and pressured commercial banks to reduce interest rates as a means to boost lending and aid economic recovery in the world’s largest emerging market after China.
After March inflation climbed above the upper limit of the government’s target range, the central bank raised its key rate to 7.5 percent from a record low 7.25 percent, where it had remained since October. Brazil’s average rate on loans fell to 26.1 percent in March from 26.5 percent in February.
Average rate on consumer loans fell to 34.5 percent from 35.1 percent a month earlier. Outstanding credit rose 1.8 percent in March from February to 2.43 trillion reais ($1.2 trillion), the central bank said today.
Swap rates on the contract maturing in January 2014, the most traded in Sao Paulo today, rose 2 basis points, or 0.02 percentage point, to 7.95 percent at 10:40 a.m. local time. The real rose 0.04 percent to 2.0004 per U.S. dollar.
Brazil’s inflation accelerated for nine straight months through March, reaching 6.59 percent. A week after the government’s statistics institute reported the data, the central bank’s monetary policy committee, known as Copom, raised its benchmark rate for the first time since July 2011.
The government targets annual inflation of 4.5 percent, plus or minus two percentage points. “I have a growing conviction that the Copom may be prompted to reflect on the possibility of intensifying the use of its monetary policy tool, the Selic rate,” Carlos Hamilton, the bank’s director of monetary policy, said yesterday at an event in Sao Paulo.
Swap rates rose after his comments. Brazil’s gross domestic product will expand by 3 percent this year, according to the latest central bank survey of about 100 economists. Latin America’s largest economy grew by 0.9 percent last year, its second-worst performance in 13 years.
bloomberg.com
The consumer default rate fell for a third consecutive month to 7.6 percent from 7.7 percent in February, the central bank said in a report distributed today in Brasilia. The company loan default rate fell to 3.6% from 3.7 percent.
President Dilma Rousseff’s administration has lowered reserve requirements and pressured commercial banks to reduce interest rates as a means to boost lending and aid economic recovery in the world’s largest emerging market after China.
After March inflation climbed above the upper limit of the government’s target range, the central bank raised its key rate to 7.5 percent from a record low 7.25 percent, where it had remained since October. Brazil’s average rate on loans fell to 26.1 percent in March from 26.5 percent in February.
Average rate on consumer loans fell to 34.5 percent from 35.1 percent a month earlier. Outstanding credit rose 1.8 percent in March from February to 2.43 trillion reais ($1.2 trillion), the central bank said today.
Swap rates on the contract maturing in January 2014, the most traded in Sao Paulo today, rose 2 basis points, or 0.02 percentage point, to 7.95 percent at 10:40 a.m. local time. The real rose 0.04 percent to 2.0004 per U.S. dollar.
Brazil’s inflation accelerated for nine straight months through March, reaching 6.59 percent. A week after the government’s statistics institute reported the data, the central bank’s monetary policy committee, known as Copom, raised its benchmark rate for the first time since July 2011.
The government targets annual inflation of 4.5 percent, plus or minus two percentage points. “I have a growing conviction that the Copom may be prompted to reflect on the possibility of intensifying the use of its monetary policy tool, the Selic rate,” Carlos Hamilton, the bank’s director of monetary policy, said yesterday at an event in Sao Paulo.
Swap rates rose after his comments. Brazil’s gross domestic product will expand by 3 percent this year, according to the latest central bank survey of about 100 economists. Latin America’s largest economy grew by 0.9 percent last year, its second-worst performance in 13 years.
bloomberg.com
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