Main points:

  • In April, IOF tax on consumer credit went from 1.5% to 3.0%
  • Capital requirements are 8.25% to 33% of loan, depending on risk.  Capital requirements lowered for loans under 60 months; increased for loans over 60 months.
  • Default rate on consumer loans at 6.8% in September vs. 5.7% at the start of the year
  • October default rates on on cars, motorcycles, and trucks at 4.7%, the highest since September 2009.  Compare to 3.1% a year earlier and 4.4% in September
  • Consumer interest rates at 45.7% in September vs. 39.4% a year earlier
  • Next central bank policy meeting is Nov 29-30; outcome uncertain whether cut would be 50 bps or 75 bps
Further Reading

Banco Central Do Brasil

BloombergBrazil Central Bank Adjusts Capital Requirements for Some Consumer Loans

 

FT: Auto loans feel the heat

Featured Photo Credit: flickr/tsc_traveler