The Brazilian Central Bank cut the Selic rate by 0.50 percentage points to 4.5% per year. This is the lowest level in the history of the basic interest rates of the Brazilian economy. Now, Brazilian financial market experts point out that traditional investments such as savings, and Selic-linked Treasury Direct bonds are expected to post negative returns.
Currently, in Brazil, 85% of the current account balance is concentrated in four large banks. This oligopoly of banks forced the overdraft limit to the absurd levels that are in force today in Brazil.
According to the master of economics from the University of São Paulo, Mauricio Gutemberg, as there is no broad and significant competition in the financial sector in Brazil, market forces do not produce a balance. Instead, what you see is interest rates on your credit card and overdraft that are way above any acceptable level.
It was trying to reduce these abusive interest rates that the Brazilian Central Bank decided to limit interest on overdraft. From January 6, 2020, they will be at most 8% per month. With this, the annual interest will have a ceiling of 150% in Brazil. Today, the average rate is over 300% per year.
No comments:
Post a Comment