Unemployment and high interest rates drop credit demand
Lower income, higher unemployment and higher interest rates have dropped the household's demand for bank credit, as evaluated Central Bank head of the economic department Túlio Maciel.
"In general, credit on consumption posted a slowdown compared with previous periods. The economic cycle itself can explain this. Another factor is the households' caution [to owe] debt, and compromise future income," said Maciel.
In addition to the consumers' caution, banks also became more selective in choosing borrowers since 2012, when delinquency has increased.
Compared with August, the total balance of nonearmarked credit operations (banks are free to set the interest rate) in September remained stable at $203.2 billion. For the car buying credit, there was a 1.1% decrease in the balance reaching $42.6 billion. There was also a 1.9% reduction in cash payment of the credit card, which totaled $ 28.7 billion in September.
According to Maciel, the reduction in credit balance for car buying and in cash payment of the credit card "indicates the consumer's fragility."
Translated by Amarílis Anchieta
Fonte: Unemployment and high interest rates drop credit demand
