Brazil’s president steps up pressure on banks to lower rates

The Wall Street Journal, 04/30/2012

Brazil’s President Dilma Rousseff Monday said interest rates on loans in Brazil are still too high, keeping up the pressure on private-sector banks to lower rates further.

“It is inadmissible that Brazil, which has one of the most solid and profitable financial systems, continues to have some of the highest interest rates in the world,” Rousseff said in a television address ahead of the May Day holiday.

The president and other administration officials have complained loudly for months that, despite significant base rate cuts by the central bank, interest rates on loans for companies and for consumers have barely fallen. The banks said that a high tax burden, high labor costs and difficulties collecting on bad loans make lending more expensive in Brazil than in other parts of the world.

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