New CB methodology cuts household debt levels

Thursday, September 22, 2011

Brazil's household debt affordability index has fallen as a result of new methodology introduced by the central bank.

The new methodology follows more closely the international standard, investment bank Barclays Capital said in a research note. The new measuring method cuts the estimates of total household debt as a proportion to income by about 200 basis points to roughly 35%.

Barclays believes the new data disproves rumors of an alarming rise in Brazil's household debt ratios and allows for more trustworthy credit analysis.

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