Even though they remain high, as the head of the Economic Department of Brazil’s Central Bank (BC), Altamir Lopes admits, the interest rates charged for personal loans are the lowest since the Real Plan was first adopted in July, 1994.
The average annual interest rate charged for such loans in March was 59%. These data are contained in the monthly report on Monetary Policy and Financial System Credit Operations, issued by the BC on Tuesday, April 25.
Another index that remains high is the spread, the difference between what it costs banks to obtain money and what they charge to lend it. The bank spread for individuals was 44% in March.
The report demonstrates that bank spreads have been growing, despite the cuts made by the BC in the annualized overnight benchmark interest rate, used in the Special System of Liquidation and Custody (SELIC).
Albeit high and trending upwards, the current bank spread is still close to its historic floor. According to the report, the lowest bank spread in the past ten years was 42.6%, in April, 2005.
Interest rates on bank loans to corporate entities were also near their historic lows. The average annual rate charged in March, 30.7%, was the lowest since September, 1994.
Agência Brasil
Show Comments (4)
Guest
Beyond Ridiculous
Truly amazing… how a third world country who has financial difficulties, with a minimum wage that is absurdly low, have such high interest rates? As I look at overseas interest rates (variable) of 9.5% (APR) compared to Brazil’s 59%… how can we come to any other conclusion that THIS IS A CORRUPT COUNTRY!!!
Pitiful, disgraceful, pathetic, ridiculous…makes me sick to my stomach!!
Guest
“The bank spread for individuals was 44% in March.”
THIS is the catch….the bank SPREAD. Now please, someone explain to me how the cost for a bank to obtain cash at approximately 1% per month, loan it out at 5% per month…and 5% as they’ve stated is the lowest in decades! One here in brazil can pay up to 12% interest PER MONTH on their “check especial”, or credit line in his checking account.
This is absurd and I can’t believe that the government allows it to happen. Talking about being in bed with the Jews!!! The must LOVE brasil!
Guest
And LuIa….
does nothing.
He his financed by the banks for his re-election. Nice verbal deal !
Guest
How can a country….
have consumer buying power with such rates when inflation is only 5 % ?
yopu just end up paying double the price, that is already not cheap on imported goods due to your high import taxes.
But the elite can still import the latest Mercedes, BMW with all options anyway.