By Ben Tavener, Senior Contributing Reporter
RIO DE JANEIRO, BRAZIL – Banco do Brasil (Bank of Brazil, BB) announced yesterday that it would be reducing interest rates on personal and corporate loans. The new rates will take effect on Monday, April 23rd, and will be second cut in the rates this month.
According to the bank, Brazil’s largest and longest-running, the latest rate adjustments reflect changes in the SELIC, the country’s key interest rate which is regulated by the Central Bank, as well as seeking to keep the bank’s rates among the lowest on the market.
The news comes just a day after the Central Bank announced it would reduce the SELIC from 9.75 to 9.0 percent - its lowest level in two years as inflation concerns appear to ease.
Banco do Brasil’s most important cut is likely to be that to its individual overdraft rate, which it is slashing from 1.97 percent to 1.38 percent.
It is expected the cut in the rate will attract more customers, and galvanize confidence in others to take out bigger loans.
The government had previously been pressuring banks to lower their rates to improve competition and lower banking fees. Although Banco do Brasil was the first to do so, it was soon followed by its rivals: Caixa, HSBC, Santander, Bradesco and Itaú.
Yesterday’s announcement by Banco do Brasil is likely to rekindle that competition and see further rate reductions elsewhere.
Read more (in Portuguese).
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