Brazil's hot, or overheated, economy has prompted the Central bank to raise bank reserve requirements from 15% to 20%.
The requirement is on cash and time deposits in an attempt to slow consumer lending whihc has been growing 20 percent annually and also to prevent a credit bubble.
Additional requirement for cash deposits will also raise to 12% from 8%.
The CB says that reserve requirements are now at a level that is slightly tighter than before the 2008 global credit crunch.
We track all Brazilian ETFs live here. Should be very interesting today.
The measures taken today could cause interest rates charged to consumers to rise.
Friday, December 3, 2010
Overheated Brazil Raises Bank Reserve Requirements to 20% to Prevent Bubbles
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