Economic Information

PRESS RELEASE - May 25, 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$3,072 billion in April, falling by 0.2% in the month and 2.2% over twelve months (compared with respective variations of +0.2% and -2.6% in March). Operations with households grew by 0.1% in the month, reaching R$1,577 billion, while operations with corporations decreased by 0.5% to R$1,495 billion. The credit/GDP ratio dropped by 0.2 p.p. to 48.4%, compared with 51.8% in April 2016.

The credit portfolio with nonearmarked resources totaled R$1,526 billion (-0.6% in the month and -3.2% over twelve months). The household portfolio declined by 0.4% in the month to R$806 billion, highlighting the balance of credit card operations with immediate payment. With regard to corporate operations, the balance reached R$719 billion (-0.8%), with emphasis on the decline of working capital operations.

Earmarked credit operations totaled R$1,546 billion (+0.2% in the month and -1.1% over twelve months). As for household operations, the balance reached R$771 billion (+0.6% in the month), while rural and real estate financing continued on an upward trend. The balance of corporate earmarked credits dropped by 0.3% in the month to R$775 billion, highlighting the settlement of investment financing with BNDES resources.

Among borrowers' economic activity segments, the sharpest decreases were observed for manufacturing (-1.1%, balance of R$393 billion) and trade (-1.1%, balance of R$257 billion). Considering operations above R$1,000, the regional distribution of credit operations revealed declines in the Southeast (-0.6%, R$ 1,622 billion) and Northeast (-0.4%, R$396 billion).


I1 - Interest and default rates

The average interest rate of financial system credit operations, including operations with nonearmarked and earmarked resources, reached 30.2% p.y. in April (-1.9 p.p. in the month and -2.4 p.p. over 12 months). With regard to operations with nonearmarked resources, the rate fell by 3.4 p.p. in the month to 49.1% p.y., while the rate for operations with earmarked resources closed at 9.9% p.y., reflecting a decrease of 0.6 p.p. in the month.

The average rate closed at 38.7% p.y. in the household segment (-2.7 p.p. in the month and-3.1 p.p. over 12 months). The monthly rate dropped by 4.6 p.p. to 68.1% p.y. in the nonearmarked segment, mainly due to a reduction of 135 p.p. in the interest rate for revolving credit cards, which fell from 431.1% to 296.1%. Sharpest declines were observed in non-regular revolving credit cards (-4.6 p. p) and in non-payroll deducted personal loans (-6 p.p.). The rate of earmarked credit operations dropped by 0.6 p.p., reaching 9.0%, with emphasis on the decline of 0.8 p.p. under real estate financing.

The average rate reached 19.2% p.y. in the corporate portfolio (-0.8 p.p. in the month and -2.8 p.p. over twelve months). With regard to nonearmarked operations, the rate reached 26.3% p.y. (-1.2 p.p. in the month). In the earmarked segment, the rate closed at 11% (-0.7 p.p.), with a decrease of 0.8 p.p. under investment financing with BNDES resources.

The average bank spread of operations with nonearmarked and earmarked resources reached 22.3 p.p. (-1.5 p.p. in the month and-0.2 p.p. over 12 months), 39.1 p.p. in the nonearmarked segment (-3.2 p.p. in the month) and 4.2 p.p. in the earmarked segment (-0.1 p.p.). The rate fell by 2.3 p.p. in the household segment to 30.9 p.p., and 0.5 p.p. in the corporate segment, to 11.2 p.p.

The default rate of financial system credit operations related to credit balances overdue for more than 90 days reached 3.9%, remaining stable in the month and increasing by 0.3 p.p. over 12 months. As for the household segment, the default rate remained at 4% in the month and fell by 0.3 p.p. over 12 months, while, in the corporate portfolio, the rate increased by 0.1 p.p. in the month to 3.8% (+0.7 p.p. over 12 months). In the nonearmarked segment, the default rate remained unchanged in the month (5.7%), while, in the earmarked segment, the rate increased by 0.2 p.p. to 2.2%.


II - Evolution of monetary aggregates

The average daily balance of the monetary base totaled R$248.7 billion in April, increasing by 0.3% in the month and 4.8% over twelve months. The monthly variation reflected an increase of 0.8% in the balance of currency issued and a decline of 3.1% in bank reserves.

Among the monthly flows of factors conditioning the monetary base, items worth highlighting were the expansionary impacts from operations with federal government securities (R$13.4 billion) and foreign sector operations (R$13.3 billion). Conversely, National Treasury operations were responsible for a fall of R$8.8 billion.

The average daily balance of the restricted means of payment (M1) totaled R$314.5 billion in April, growing by 1.1% in the month (+3.6% over twelve months), corresponding to increases of 1.6% in demand deposits and 0.6% in currency outside banks.

The balance of the means of payment in the M2 concept, which corresponds to M1 plus savings deposits and private securities issued by financial institutions, reached R$2.3 trillion (+0.6% in the month). This result reflected an increase of 0.7% in private securities to R$1.4 trillion, and 0.3% in savings deposits to R$665.2 billion. In the month, net inflows of demand deposits reached R$23.9 billion, while savings accounts registered net redemptions of R$1.3 billion.

M3, which comprises M2, quotas of fixed-income funds and government securities backing repurchase operations between the public and the financial sector, decreased by 0.1% in the month, totaling R$5.4 trillion, with a decrease of 13.2% in repo operations to R$141.7 billion. The quotas of fixed-income funds remained stable in the month at R$2.9 trillion. M4, comprising M3 and government securities held by the non-financial public, increased by 0.4% in the month and 9% over twelve months, reaching R$6.3 trillion.