Economic Information

PRESS RELEASE - July 27, 2017

Monetary Policy and Financial System Credit Operations
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I - Financial system credit operations

The balance of financial system credit operations reached R$3,078 billion in June (+0.4% in the month and -1.6% over twelve months). The balance of the corporate portfolio rose by 0.3% in the month to R$1,483 billion, while the balance of the household portfolio grew by 0.5% to R$1,595 billion. The credit/GDP ratio rose by 0.2 p.p. in the month to 48.2%, compared with 51.1% in June 2016.

The credit portfolio with nonearmarked resources totaled R$1,532 billion (+0.6% in the month and -2.4% over twelve months). The balance of household credit operations grew by 0.5% in the month to R$818 billion, highlighting payroll-deducted loans. Corporate transactions totaled R$713 billion (+0.8% in the month), with emphasis on discount of trade bills and credit receivables.

The balance of the earmarked credit portfolio totaled R$1,547 billion (+0.2% in the month and -0.9% over twelve months). The balance of household operations grew by 0.5% in the month to R$777 billion, highlighting real estate financing at regulated rates. The credit balance of the corporate segment fell by 0.2% to R$769 billion, with emphasis on the decrease under BNDES financing, offsetting the increase under rural credit loans.

Considering the economic activity of credit borrowers by segment, it should be highlighted the increase in operations with the service sector (+1%, balance of R$716 billion), with emphasis on trade (+2.1%, R$257 billion). Considering operations above R$1,000, it is noteworthy regional increases in the Northeast (+0.6%, R$399 billion), Central-West (+0.6%, R$335 billion), and Southeast (+0.1%, R$1,622 billion).


Interest and default rates

The Cost-of-Borrowing Indicator (CBI), which calculates the average cost of all active credit operations, fell for the fourth consecutive month, reaching 22.2% (-0.2 p.p. in the month and -0.6 p.p. over twelve months). The indicator for nonearmarked credit operations fell by 0.5 p.p to 37.1% in the month, with decreases of 0.4 p.p. for households (49.3%) and 0.6 p.p. for corporations (24.2%). The CBI reached 9% (+0.1 p.p. in the month) in the earmarked credit segment.

The average interest rate of financial system credit operations continued on the downward trend started in February, reaching 28.8% p.y. in June (-0.6 p.p. in the month and -3.7 p.p. over twelve months). The average rate in the nonearmarked credit segment dropped by 1.2 p.p. in the month to 46.1%, while the average rate for the earmarked segment closed at 10.2% p.y. (-0.1 p.p. in the month).

The average interest rate of the household segment reached 36.4% p.y. (-0.8 p.p. in the month and -5.5 p.p. over twelve months). The interest rate reached 63.3% p.y. (-1.2 p.p. in the month) in the nonearmarked segment, highlighting revolving credit cards (-28.1 p.p.) and non payroll-deducted loans (-7.6 p.p.). As for the earmarked segment, the interest rate of household operations fell by 0.5 p.p. to 9.2% p.y., with emphasis on real estate financing (-0.7 p.p.).

In the corporate segment, the average interest rate reached 18.7% p.y. (-0.5 p.p. in the month and -2.8 p.p. over twelve months). As for nonearmarked operations, the rate reached 24.8% p.y. (-1.3 p.p. in the month), highlighting reductions in discount of trade bills and credit receivables (-4.1 p.p.) and working capital (-1.6 p.p.). With regard to earmarked operations, the rate reached 11.7% p.y. (+0.4 p.p.), with emphasis on the increase of 0.6 p.p. under investment financing with BNDES resources.

The average bank spread of operations with nonearmarked and earmarked resources reached 21 p.p. (-0.5 p.p. in the month and -1.6 p.p. over twelve months), posting monthly declines in the household (-0.7 p.p. to 28.7 p.p.) and corporate segments (-0.5 p.p. to 10.8 p.p.). The indicator reached 36.5 p.p. in the nonearmarked segment (-1.2 p.p.) and 4.4 p.p. in the earmarked segment (+0.1 p.p. in the month).

The default rate, related to credit balances overdue for more than 90 days, fell from 4% to 3.7% in June (+0.2 p.p. over 12 months). The default rate decreased by 0.2 p.p. in the month in the household segment (3.9%) and 0.4 p.p. in the corporate segment (3.6%). Delinquency reached 5.6% in the nonearmarked credit segment and 1.9% in the earmarked credit segment, both registering declines of 0.3 p.p. in June.


II - Evolution of monetary aggregates

The average daily balance of the monetary base reached R$250.5 billion in June, increasing by 1% in the month and 5.9% over twelve months. The monthly result reflected expansions under the balances of bank reserves (4.4%) and currency issued (0.4%).

Among the monthly flows of factors conditioning the monetary base, items worth highlighting were the expansionary impacts of National Treasury operations (R$18.6 billion) and operations with federal government securities (R$4.8 billion), reflecting net purchases of R$75.9 billion in the secondary market and net placements of R$71.1 billion in the primary market.

The average daily balance of the restricted means of payment (M1) totaled R$314.9 billion in June, consequent upon an increase of 0.8% in the month, which resulted from increases of 1% in currency outside banks and 0.4% in demand deposits. M1 grew by 5.3% over twelve months.

The balance of the means of payment in the M2 concept, which corresponds to M1 plus savings deposits and private securities increased by 0.8% in June, totaling R$2.4 trillion. This result reflected monthly increases of 1.1% in savings deposits, balance of R$676.4 billion, and 0.4% in private securities to R$1.4 trillion. In the month time deposits expanded by R$17 billion, while savings deposits rose by R$6.1 billion.

M3, which comprises M2, quotas of fixed-income funds and government securities backing repurchase operations between the public and the financial sector, totaled R$5.5 trillion, growing by 0.5% in the month. The balance of quotas of fixed-income funds grew by 1.2% to R$3 trillion, while the amount of repurchase operations with federal government securities fell by 21.5%. M4, which comprises M3 and government securities held by the nonfinancial public, grew by 0.6% in the month and 8.8% over the last twelve months, totaling R$6.3 trillion.