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Brazilians Are Told Credit Access Is Back to Normal

Credit availability in Brazil has returned to levels seen before the deepening of the global credit crisis in September. This according to Brazilian Central Bank President Henrique Meirelles, who announced the good news this Monday, February 10.

Speaking before a group of business leaders in Brazilian capital Brasí­lia, Meirelles said the improvement in credit supply came as a result of government initiatives to compensate for tight liquidity abroad.

"We are substituting foreign credit," said Meirelles. "In a second phase, it will be important for the costs of credit to decline." On an indexed scale of 100, Brazil's credit availability rose to 101.1 in January from a low of 92.7 in September, Meirelles said.

As part of those efforts since September, Meirelles revealed Brazil's central bank freed up 99.2 billion USD in banking reserve requirements to assure local credit supply.

In January alone, Brazil's central bank injected 61 billion into local markets via spot dollar sales and export credit auctions as a strategy to increase foreign currency liquidity.

In light of improvements noted so far, Meirelles on Monday urged business leaders present to maintain their investment plans.

"It's important that we be realistic, but excessively defensive behavior can exacerbate problems," he said.

According to recent market forecasts, Brazil's economy is projected to grow only about 1.7% this year after expanding by around 5% in 2008.

Mercopress

Next: Brazil’s Package to Boost Economy Includes 1 Million New Homes
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