Economic Information

PRESS RELEASE - October 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$3,048 billion in September, remaining stable in the month and falling by 2.0% over twelve months. The household credit portfolio totaled R$1,616 billion (+0.2% in the month and +4.7% over twelve months). The corporate credit portfolio totaled R$1,432 billion, falling by 0.4% in the month and 8.7% over twelve months. The credit/GDP ratio reached 47.0% (50.2% in September 2016).

The credit portfolio with nonearmarked resources reached R$1,530 billion (+0.2% in the month and -1.1% over 12 months). It should be highlighted the monthly growth of 0.5% in corporate credit operations to R$702 billion, due to a seasonal increase in operations related to discount of trade bills and receivables. Notwithstanding the stability observed in the concessions of working capital operations in the month, the balances of this credit modality fell in the period due to settlement of operations. With regard to the household credit portfolio, with a balance of R$828 billion (-0.1% in the month), lower overdraft accounts and credit card balances offset increased payroll-deducted loans and vehicle financing.

Financing with earmarked resources reached a balance of R$1,518 billion (-0.3% in the month and -2.9% over twelve months), with a decrease in the corporate segment (-1.2% in the month, with a balance of R$730 billion), notably in investment financing with BNDES resources. Operations with households totaled R$788 billion (+0.6% in the month), highlighting rural credits, reflecting the seasonal demand increase consequent upon the harvest of grains.

With regard to the classification of operation according to the sectors of economic activity, the credit taken by industry - balance of R$690 billion - decreased by 1.3% in the month (-1.9% in manufacturing), while credit granted to the service sector increased by 0.6%, totaling R$690 billion, with signs of recovery in the trade segment (+1.2%). Considering operations above R$1,000, it should be highlighted regional variations as follows: increases in the North (+0.6% in the month, R$117 billion) and in the Southeast (+0.1%, R$1,607 billion) and a decrease in the Northeast (-0.4%, R$398 billion).

Interest and default rates

In September, the Cost-of-Borrowing Indicator (CBI), which calculates the average cost of all active credit operations, fell by 0.3 p.p. to 21.8% p.y. (-1.3 p.p. over twelve months). The indicator for nonearmarked credits fell by 0.8 p.p. in the month and 3.4 p.p. over 12 months to 35.9%, remaining at 8.9% p.y. since February in the earmarked credit segment.

The average interest rate of financial system credit operations, considering operations with nonearmarked and earmarked resources, reached 27% p.y. in September (-1.4 p.p. in the month and -6.1 p.p. over twelve months). The average rate for nonearmarked credits reached 43.3% p.y. (-2.3 p.p. in the month and -10.3 p.p. over 12 months), while the average rate for earmarked credits fell to 9.3% p.y., consequent upon variations of -0.7 p.p. in the month and -1.7 p.p. over twelve months.

The average interest rate of the household segment fell by 1.7 p.p. in the month and 9.0 p.p. over 12 months to 33.9% p.y. With regard to credits with nonearmarked resources, the rate reached 59.2% p.y. (-3.1 p.p. in the month), highlighting decreases in the non-regular revolving credit card debt (-106.8 p.p.) and non-payroll-deducted personal loans (-3.1 p.p.). As for credits taken with earmarked resources, the average monthly cost decreased from 8.5% to 8.4% p.y.

In the corporate segment, the average rate reached 17.5% p.y. (-1.2 p.p. in the month and -3.8 p.p. over 12 months). In the nonearmarked credit segment, the interest rate fell by 1.1 p.p. in the month to 23.2% p.y., along with decreases in several credit modalities. In the earmarked credit segment, the interest rate decreased by 1.4 p.p. to 10.7% p.y., with emphasis on the decrease of 1.8 p.p. under investment financing with BNDES resources.

The bank spread of operations with nonearmarked and earmarked resources registered the sharpest decline since April, -1.0 p.p. (-3.3, p.p. over twelve months), to 20.2 p.p. The indicator reached 27.2 p.p. (-1.4 p.p. in the month) in the household segment, and 10.5 p.p. (-0.9 p.p.) in the corporate segment. In the nonearmarked segment, the spread fell by 1.8 p.p., reaching 35.1 p.p., while, in the earmarked segment, the spread fell by 0.5 p.p. to 4.0 p.p. in September.

The default rate of financial system credit operations related to credit balances overdue for more than 90 days closed at 3.6% (-0.1 p.p. in the month and over 12 months). In the month, the interest rate fell by 0.2 p.p. in the corporate segment to 3.3%, and remained stable at 3.9% in the household segment. In the nonearmarked segment, the rate fell by 0.2 p.p. (5.4%), while, in the earmarked segment, the default rate remained stable at 1.8%.


II - Evolution of monetary aggregates

The average daily balance of the monetary base totaled R$254.4 billion in September, reflecting expansions of 1.8% in the month and 4.6% over twelve months. The monthly variation reflected an increase of 2.2% in the balance of currency issued and a decrease of 0.5% in bank reserves.

Among the monthly flows of factors conditioning the monetary base, items worth highlighting were operations with federal government securities, accounting for an expansionary impact of R$16.8 billion (net purchases of R$17.5 billion in the secondary market and net placements of R$635 million in the primary market); and National Treasury operations, accounting for a contraction of R$7.7 billion.

The average daily balance of the restricted means of payment (M1) reached R$318.9 billion in September, due to an expansion of 1.6% in the month, corresponding to increases of 2.1% in currency outside banks and 1% in demand deposits. M1 grew by 3.6% 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 0.7% in September to R$2.4 trillion. This variation reflected increases of 1.5% in end-of-period balances of restricted payments (M1), 0.8% in savings deposits (balance of R$696 billion), and 0.4% in private securities (R$1.4 trillion). In the month, net inflows totaled R$3.7 billion in savings accounts and R$5.5 billion in demand deposits.

M3, which comprises M2, quotas of fixed-income funds and government securities backing repurchase operations between the public and the financial sector grew by 0.8% to R$5.7 trillion. The balance of quotas of fixed-income funds grew by 0.9% in the period to R$3.2 trillion, while repo operations fell by 2.8% to R$87 billion. M4, which comprises M3 and government securities held by the nonfinancial public, grew by 0.7% in the month and 9.4% over the last twelve months, totaling R$6.5 trillion.