The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Opinion

Brazil’s belief in terraforming interest rates

Could lower interest rates give lift-off to Brazil’s economy? And how might they be achieved?

When talking to financial professionals in Brazil these days, the conversation often turns to the economy taking the next step in its progress and development. Brazil wants/expects/needs lower interest rates (the verb changes but the basic thrust is consistent) to kick-start a 10-year cycle of sustainable growth.

This faith in the terraforming effect of lowering the base interest rate from its present 10.75% is reminiscent, for connoisseurs of trashy science fiction films, of Total Recall. This 1990 film is set in a mining colony on planet Mars, the commodity being extracted from beneath the surface of the red planet in 2084 is turbinium ore, not iron ore, and there is nothing to suggest that the primary destination is China. A few plot twists aside, the hero (Arnold Schwarzenegger) manages to release oxygen into the Martian atmosphere, kick-starting virtuous oxygen, hydrogen and water cycles that create an earth-like environment able to sustain vegetative growth and human life.

It feels as if Brazil’s financial community believes that if the government was able to release lower interest rates the macro-environment landscape would be radically changed, becoming less febrile and more fertile. With investors’ high interest rate ventilators switched off, springs of long-term financing will appear and infrastructure projects will pop up throughout the country.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree