Brazil Alters Compulsory Deposit Rules
Due To Rate Hike
Dow Jones Newswires
BRASILIA -- Rules regulating the compulsory Central Bank deposits
which financial institutions have to make on long-term investments they
receive, have been adjusted following last week's interest rate hike, the
Central bank announced Wednesday.
As reported, last Thursday the Monetary Policy Committee raised the
Tban, the current rate at which the monetary authority lends money to
banks, to 49.75% from 29.75% in response to the massive outflow of
dollars since the beginning of September.
Before, these compulsory deposits were remunerated by the Central Bank
using the TBC, or basic interest rate, currently at 19%.
But following the Central Bank decision earlier this month to only apply the
Tban ceiling rate for loans to the financial system, these compulsory
deposits will now be remunerated on basis of the Special System for
Settlement and Custody, known as SELIC, or "overnight" rate.
Fines for not complying with the compulsory deposits will now be
calculated at the Tban rate plus 12%, as against the TBC rate plus 18%
before, if the institution's banking reserves are in the black.
In case of an overdraft in its reserves, the fines applied will be the Tban
rate plus 18%, instead of TBC plus 27% before, the Central Bank said.
-By William Vanvolsem; (5561) 2443095; wvanvolsem@ap.org
Ret |
