Not content with waging a “currency war” against the rest of the world, Brazil’s government is now doing battle with its own banks over the high interest rates charged on loans to consumers and businesses. Various factors explain the high lending spreads enjoyed by Brazil’s banks, but the key point is that moral suasion by the government is unlikely to solve the problem. Instead, winning the war on interest rates will require deep (and unpopular) reforms to raise domestic savings.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services