Brazil’s Central Bank forecasts greater credit moderation

Brazil’s Central Bank (“BC”) has reduced from 13 to 12 percent the increase expected in credit operations this year, with less participation by Brazilian private banks and more involvement by foreign ones.

According to the institution, the credit of public banks is expected to increase by 17 percent, the same as the previous rate. Domestic private banks, in turn, will likely report a rise of 9 percent, against the 8 percent foreseen by BC in March.

Tulio Maciel, BC’s head of the economic department, pointed out that this range of moderation is a long-term trend. “What is expected when there’s a rise in the interest rate is the moderation of loans. Nonetheless, credit still contributes to the development of the country in a sustainable manner,” he said.

Maciel believes that the trust now more reluctantly placed by customers “is another factor which tends to exert an influence in borrowing, since it implies a cautious attitude on the part of both borrowers and banks,” he added.

Translated by Fabrício Ferreira

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