trending Market Intelligence /marketintelligence/en/news-insights/trending/OliOsm7R9DZvFN-7mFhsYQ2 content
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *
  • We generated a verification code for you

  • Enter verification Code here*

* Required

In This List

Moody's: Brazil central bank's rate cut to benefit borrowers across sectors

Street Talk Episode 56 - Latest bank MOE shows even the strong need scale to thrive

South State CenterState MOE Shows Even The Strong Need Scale To Thrive

Talking Bank Stocks, Playing The M&A Trade With Longtime Investor

Report: Kashkari Says Fed In Holding Pattern But Rate Cut Still Possible


Moody's: Brazil central bank's rate cut to benefit borrowers across sectors

The recent Selic rate cut by Banco Central do Brasil will benefit non-financial companies across various sectors, which are now more likely to access funding without bank intermediation, Moody's said in a report Aug. 2.

On July 31, Brazil's central bank cut its benchmark Selic rate by 50 basis points to 6.00%, citing expectations for a slower economic recovery for the Latin American country.

According to Moody's, the move will support investment and economic growth, as the reduction in interest rates will have a positive impact on debt dynamics. And as the Selic rate is expected to continue to drop to 5.5%, the fiscal consolidation required to stabilize the debt burden will be alleviated.

Furthermore, the rate cut will help expand capital markets and increase liquidity, the report said. Financing options will be broadened by the lower costs and debt issuances are likely to continue to expand.

"Brazilian companies pay substantially more interest on their debt than their global counterparts; therefore, the ongoing shifts in funding costs and conditions should help to improve their profitability," Moody's said.

According to the rating agency, interest-rate sensitive sectors including utilities and infrastructure would also profit from the rate cuts because it will help facilitate refinancing.

Moreover, "the rate cut will also be positive for consumer loan securitizations both in terms of credit quality and performance," Moody's said, adding that lower rates promote loan origination demand, decreasing pressure on lenders to loosen underwriting.