Defaults on free resources in Brazil advanced in October to the highest level in almost four years, data from the Central Bank showed this Monday (28), amid the high cost of borrowing after the aggressive cycle of monetary tightening.
The default rate on free resources increased to 4.20% in October from 4.10% in the previous month, the highest rate since August 2018, when it was 4.22%.
At the same time, the banking spread in the same segment was 30.3%, from 28.6% in September.
The BC recently issued a warning about risks to the country’s financial stability in a possible scenario of increased public spending and uncertainty about the government’s debt trajectory, with an impact on risk premiums and inflation expectations.
According to the BC, the ability of individuals to pay has deteriorated even in the face of better indicators for the economy and the labor market.
The total stock of credit in Brazil rose 1.0% in October compared to September, to 5.215 trillion reais, corresponding to 54.9% of GDP (Gross Domestic Product), GDP data also showed. In 12 months, the rate decelerated to 15.8%, from 16.4% in September.
The BC forecasts an increase of 14.2% in credit this year.
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