Central bank chief says war chest is ready to face turbulent times

- Friday, September 30, 2011

Central bank chief says war chest is ready to face turbulent times

Brazilian central bank (BCB) president Alexandre Tombini said in a presentation that the country's financial system has a strong war chest that makes it well prepared for today''s turbulent times.

Brazil's economy is expected to grow less than initially expected this year, due to the European debt crisis and the slowdown in the global economy. BCB recently revised its GDP growth forecast for 2011 to 3.4%, from the previous 4.0%.

But Tombini said the stability and growth of Brazil's financial system will stay intact due to, among other factors, a war chest consisting of high reserve deposits and international reserves.

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At the end of September, the deposits that the financial system held at the BCB as reserves amounted to 432bn reais (US$230bn) and international reserves to US$352bn. Both figures are much higher than before the global crisis in 2008, which Brazil managed to withstand on a solid footing.