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.

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

Brazil: Bankers’ daydreams

Just imagine if it all goes right in Brazil.



Brazil-dreamcatchers-600
Brazilian dreamcatchers


Imagine what would happen in a country whose state development bank – which accounts for around 50% of corporate credit – decides suddenly and substantially to cut the level of its funding to the private sector. 

And, at the same time, its government also changes the interest rates that the development bank charges from a subsidized rate far below the country’s base rate to one that is very close to that base rate (and therefore much closer to lending terms available from private-sector banks). 

Imagine this is happening in a country with huge infrastructure needs; a really big country of more than 200 million people and one rich in many of the commodities most sought after by the rest of the world. And suppose that the country is also coming out of its worst-ever recession and the consensus GDP growth forecast for the next year is closing in on 3%. 

Interest rates

Imagine this country’s interest rates are going to halve in a swift monetary easing cycle to around 7%; that this country’s corporates are emerging from this recession de-levered and ready to invest and take advantage of an unprecedented low cost of credit.





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