The latest figures have been released by the National Association of Executives, Administration and Accounting (Anefac). Back in March 2009, the monthly rate was pegged at 13.45%, which worked out at 354.63% a year.
Credit cards remain the most expensive form of borrowing money in Brazil. The next most expensive form of borrowing is the bank overdraft which in June had an interest rate of 10.01% (214.19% annually). This is the highest level since January 2003, when the rate was just marginally higher at 10.18% (220.06%).
The cheapest form of borrowing, personal loans, has also reached a high point for June, pegged at a monthly 4.10%, which works out at 61.96% for the year. This is the highest it has been for nearly four years.
Taken as a whole, the overall average interest rate that individuals are paying across the main forms of credit (which includes trade interest and car loans), rose to 6.94% on a monthly basis, or 123.71% annually. This is the highest level since late 2009.
Anefac puts the higher rates down to four key areas which have impacted the market. Firstly, the economic situation has brought about worries of people defaulting on their various credit agreements. Secondly is the fear of monetary tightening which is due to high inflation. Thirdly is the advancing SELIC (The Sistema Especial de Liquidação e Custodia – Special Clearance and Escrow System – which is the Brazilian Central Bank’s overnight rate). And finally, a generally higher tax burden.
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