Brazil's Central Bank to Introduce Measures Against Household Debt

Ailton de Aquino, the Director of Supervision at the Central Bank of Brazil, announced on Tuesday that the agency will soon launch new measures to combat indebtedness. The initiatives will specifically target the most expensive lines of credit, namely credit cards and non payroll loans. Aquino stated at the Zetta Summit in Brasília that these measures aim to promote consumer transparency and will be debated with society and the National Monetary Council.

Aquino identified online betting as a central element in family indebtedness, dismissing claims that betting houses do not contribute to the problem as fake news. This announcement follows a recent meeting of the Financial Stability Committee, where the Central Bank emphasized the need for caution in credit granting due to a contractionary basic interest rate and rising delinquency levels.

Data released by the Central Bank last week shows that overdue loans in free credit, which includes credit cards, personal loans, and vehicle financing, reached 6.4 percent in July. This represents the highest level since the series began in March 2011, with delinquency for individuals specifically reaching 7.8 percent. Central Bank President Gabriel Galípolo had previously warned about the rise in indebtedness during an agenda in São Paulo last week.