Banks follow Selic, announce interest rate cuts

                                                                                                                                                                                            Marcos Santos/USP Imagens

After the latest decision by the Monetary Policy Committee (Copom) that cut Brazil's Selic benchmark interest rate to 6.50%, the country's main banks announced a reduction on the interest rates charged on loans. The Selic is used as a reference for credit and financing throughout the financial system.

Banco do Brasil announced a 0.20 p.p. per month reduction in the interest rates charged on credit card installment plans, and also that it will pass on the Selic cut to the rates on working capital credit lines, checks and sales advances given to store owners, for example.

Santander, Itaú Unibanco and Bradesco have also made the same move. All of them reported that they will reduce the rates charged to natural persons and legal entities in the wake of the sustained decrease in Selic. It is the continuation of a long easing cycle started by the Central Bank, which, in practice, means easier access to credit for both companies and individuals.