BRASILIA, Jan 24 (Reuters) - Brazil’s central bank could simplify its reserve requirement rules and eventually reduce them to lower the cost of credit for consumers, newspaper O Estado de S.Paulo reported on Tuesday.
The bank is considering unifying its rules for demand, savings and time deposits, the newspaper reported without citing sources. The unification of the formula to calculate those deposit requirements would lower the loan spread, or the difference between the interest that banks charge on their loans and their cost of funding.
The daily reported that the central bank could eventually reduce those reserve requirements to increase the amount of money flowing into the economy.
The central bank’s press office did not immediately respond to an email seeking comments.
In December, central bank governor Ilan Goldfajn announced measures to reduce credit costs for companies and consumers in the medium- to long-term as part of the government’s push to revive an economy mired in recession.
The bank will create excess reserves, a mechanism in which the bank pays interest on excess reserves kept at the bank, to increase the efficiency of monetary policy.
Under Goldfajn the bank has stepped up monetary easing, cutting its benchmark Selic rate by a whopping 75 basis points to 13 percent at its last meeting on Jan. 11.
Goldfajn has also vowed to look for ways to reduce the interest rates charged by credit card companies, which at times top 400 percent a year in Brazil.
Reserve requirements are monetary policy tools in which commercial banks are forced to keep part of their reserves at the central bank to control the volume of money in the economy. (Writing by Alonso Soto)