BCB's Tightening Cycle To Unwind

September 2008 | Economic Analysis

Tighter monetary policy in Brazil is gradually starting to put a dampener on private sector lending, with credit growth slowing to 32.8% y-o-y in August, down from 34.0% in July, and a peak of 36.5% in March. Although real credit expansion (adjusted for inflation) remained at 26.6% y-o-y in August, higher lending rates should start to cool consumer and business appetite for credit over the coming months, dampening overall domestic demand. Such a scenario would be supportive of the

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