Average bank interest advances in February and bank credit has a retraction, shows Central Bank

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Average rate charged by financial institutions increased to 44.2% per year, the highest in more than five years. Total volume of bank credit retreats 0.1% in February, and concessions fall by 2.2%. The average interest rate charged by banks in their operations with individuals and companies registered an increase in February, at the same time that the volume of credit offered by banks retreated. The information was released this Wednesday (29) by the Central Bank. The behavior of interest rates, and bank loans, takes place at a time when the Selic rate is stable at 13.75% per year. The basic interest, set by the BC to try to contain inflation, is at the highest level in more than six years. This Tuesday (28), the BC’s Monetary Policy director, Diogo Guillen, said that a credit slowdown is expected with the rise in interest rates. According to him, this “is part of the monetary policy conduction process [elevação da Selic para conter a inflação] throughout this year”. The Minister of Finance, Fernando Haddad, has informed that the economic area of ​​the government, together with the Central Bank, is concluding measures to improve the credit environment in the economy. The expectation is that the proposals will be announced in April. This is the highest level since August 2017, when it amounted to 45.6% per year, that is, in about five and a half years. The BC’s historical series begins in March 2011. was calculated based on free resources – that is, it does not include the housing, rural sectors and the National Bank for Economic and Social Development (BNDES). According to the BC, the average interest rate charged on operations with companies retreated from 25 .3% per year in January to 24.2% per year in February 2023. In operations with individuals, interest rose from 56.6% per annum in January to 58.3% per annum in February. It is the highest level since October 2017 (58.9% per year). Overdraft check and credit card In the overdraft of individuals, the rate rose from 132% per year, in January, to 137.4% per year in January 2023. This is the highest level since January 2020 (140, 8% a year). The average interest rate charged by banks on revolving credit card operations, in turn, increased from 411.4% per year in January to 417.4% per year in February. It is the highest level since August 2017 (428% per year). The revolving credit card credit can be activated by those who cannot pay the total amount of the invoice on the due date, but do not want to be in default. Even with the fall in September, the level of the revolving interest rate remains prohibitive. This is the most expensive line of credit on the market and, according to analysts, should be avoided. The recommendation is that bank customers pay the entire invoice amount monthly. Bank credit The total volume of bank credit on the market, according to the Central Bank, fell by 0.1%, to R$ 5.31 trillion in February. In January of this year, it totaled R$ 5.32 trillion. “The volume of credit for the corporate segment decreased 0.7% in the month, to R$2.1 trillion, while for the individual segment there was a monthly increase of 0.4%, totaling R$3.2 trillion”, informed the BC. For individuals, according to the BC, the highlight was the revolving credit card, payroll-deductible personal credit for public sector workers and INSS retirees and pensioners, with increases of 4.6%, 1% and 1.1%, respectively.

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