Brazil Selic Cuts Fail to Lower Bank Credit Rates; Personal Loans at 130%

Despite four consecutive Selic rate cuts since March, average bank credit rates for individuals and legal entities in Brazil have not declined, with personal credit costs reaching 130% per year. Expert Otávio Fakhoury notes that the Selic is a short-term reference rate and does not determine long-term loan pricing, which is influenced by other factors. This disconnect suggests transmission mechanism frictions, potentially limiting the stimulative effect of monetary easing on credit growth.