January loan interest rate highest since 2019

With the return of the basic interest rate (Selic) to double digits, the escalation of interest charged by banks for loans continues. In January, the average value reached 35.3% per year. The data were released by the Central Bank this Thursday (24).

The average bank rate, which was 33.8% in December last year and rose 1.5 percentage points, reached the highest level since November 2019, when it was at 35.49%. For comparison, in January 2021, it was at 28.4%.

The numbers refer to the segment of free resources, in which the cost of financing is freely established by financial institutions

In credit operations, the average annual interest rate charged by the financial system rose to 25.3% in January, against 24.3% in December 2021.

The scenario is related to the cycle of monetary tightening promoted by the BC. In February, the Copom (Monetary Policy Committee) raised the Selic from 9.25% to 10.75% per year and signaled that the tightening cycle, which began in March last year, has not yet come to an end.

After starting 2021 with the basic interest rate at the historic low of 2% per year, there were eight hikes in a row, totaling an increase of 8.75 percentage points. Now, the Selic is at the highest level since May 2017, still under Michel Temer (MDB), when interest rates were 11.25% per year.

The Selic increase cycle seeks to promote the anchoring of expectations in the face of persistent inflation.

Pressured by expenses with education, food and transport, inflation measured by the IPCA-15 (National Index of Consumer Prices 15) rose 0.99% in February, informed the IBGE (Brazilian Institute of Geography and Statistics) on Wednesday (23). ). With that, the high accumulated in 12 months until February is of 10.76%.

In addition, there was an increase in the banking spread (​the difference between the borrowing rate of banks and what they charge in loans). The spread level in operations with nonearmarked resources was 24.6 percentage points in the month, against 23.6 points in December 2021.

The monetary authority also informed, this Thursday (24), that the stock of credit in Brazil remained stable in the month of January, with a total volume of R$ 4.7 trillion, which corresponds to 53.3% of the (GDP) GDP. Gross Domestic.

The credit balance in the individual portfolio totaled R$ 1.5 trillion in January, up 1 percentage point in the month. Among the main modalities, the highlights were increases in non-consigned personal credit (3.5%), revolving credit cards (8.6%), and overdraft accounts (13.6%).

Despite the stability of the credit stock, seasonally adjusted grants of new bank loans registered an increase of 12.6%.

In credit with nonearmarked resources, the average default level registered a slight increase, rising 0.2 percentage point. In January, it is at 3.3%, against 3.1% in the previous month.

The average default rate recorded by financial institutions in credit operations went from 2.3% to 2.5% in the comparison between December 2021 and January this year.​

The BC also released statistics on household indebtedness with banks for November 2021. In the period, the total amounted to 51.9% of income accumulated in the previous twelve months, against 51.2% in October 2021. On the other hand, the commitment of families’ income remained stable (27.9%).

In the revolving credit card modality, the interest rate varied from 347.4% per year in December of last year to 346.3% per year in January. In BC’s assessment, the number indicates stability.

“The interest rate on the revolving card is very high, it is prohibitive. Customers must plan their financial expenses so that they do not fall into the revolving card and, if they eventually fall, they must leave as soon as possible”, commented the head of the Department of Statistics of the BC, Fernando Rocha.

The rate charged on overdrafts was 128.4% in January, compared to 127.9% in December.