Central bank chief hints of cooling-down measures if loan growth tops 15%

- Tuesday, March 22, 2011

Central bank chief hints of cooling-down measures if loan growth tops 15%

Brazilian central bank BCB could take measures to ensure that loan growth does not surpass 15% this year, BCB president Alexandre Tombini told the country's senate in a presentation.

BCB is monitoring the pace of loan expansion, Tombini said, adding that 10-15% would be "adequate" growth, while 15-20% would not.

GDP grew at its fastest pace in 25 years during 2010, expanding 7.5%. The stellar performance of the economy also fueled rapid loan growth of 20.5%.

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BCB hiked its Selic benchmark interest rate by half a percentage point at the beginning of this month, to 11.75%, to slow down loan growth and curb rising inflation.

Finance minister Guido Mantega recently said he expects GDP growth to slow down this year to 4.5-5% and lending to grow 12-13%.