Worsening economy and high interest rates should decrease credit in Brazil

Data from the Central Bank shows that the pace of new credit concessions has already started to decrease.

RIO DE JANEIRO, BRAZIL - The increase in the basic interest rate (SELIC) and the possible worsening of economic indicators, with new rounds of isolation measures due to the worsening of the Covid-19 pandemic, should make the credit market more restrictive throughout this year.

In this context, according to economists consulted by Folha de S.Paulo, loans will cost more and banks will be less willing to provide financing. This happens when the economy is doing badly, because the risk of default increases.

The Central Bank's COPOM (Monetary Policy Committee) raised the SELIC rate by 0.75 percentage points . . .

To read the full NEWS and much more, Subscribe to our Premium Membership Plan. Already Subscribed?