Brazil to discuss adjustments to credit guarantee fund as reserves fall short of target
Discussions on necessary adjustments will take place in the coming months, Lima stressed.
Speaking at an event hosted by payment industry group Abipag, Lima also noted that the FGC's liquidity indicator stands at around 2.3% of eligible deposits, compared to a target range of 2.3% to 2.7%.
The FGC is a private nonprofit entity created to manage protection mechanisms for clients of financial institutions in the event of bank resolution.
The fund has drawn renewed attention following the high-profile acquisition of lender Banco Master by BRB (BSLI3.SA), opens new tab, a deal currently being analyzed by the central bank.
The transaction has sparked scrutiny as it involves two similarly sized banks, with Master having grown rapidly in recent years through an aggressive funding model based on high-yield debt distributed via investment platforms.
Lima noted that addressing potential contagion risks from mid-sized banks requires more timely access to information from each institution.
The central bank said earlier this year that it would carry out a scheduled review of the FGC next year as part of its regular four-year cycle on the matter.
Debt securities issued by banks are insured by the FGC up to a limit of 250,000 reais ($44,028) per financial institution.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
6 hours ago
- Reuters
Nigeria's central bank pledges to keep policy tight as it holds key rate again
ABUJA, July 22 (Reuters) - Nigeria's central bank kept its monetary policy rate at 27.50% (NGCBIR=ECI), opens new tab for the third consecutive time this year, pledging on Tuesday to maintain its current stance until inflation risks recede. Consumer inflation (NGCPIY=ECI), opens new tab in the oil-producing West African nation fell for the third straight month in June to 22.22% year-on-year from 22.97% in May. Central Bank Governor Olayemi Cardoso acknowledged that inflation was easing. He said the rate-setting Monetary Policy Committee's decision was based on the need to sustain disinflation. "Maintaining the current monetary stance will continue to address the existing and emerging inflationary pressure," Cardoso said, adding the goal was to get inflation to single digits. Most economists polled by Reuters had predicted the central bank would keep the rate unchanged after hiking it six times in 2024 to fight soaring inflation, which repeatedly hit 28-year peaks last year. Price pressures have been spurred by President Bola Tinubu's reforms since coming to office in 2023, including ending costly subsidies and the devaluation of the naira currency . But inflation dropped sharply in January when the statistics agency updated the base year for its calculations and re-weighted the inflation basket, falling to 24.48% in annual terms from 34.80% in December. However, its decline has since slowed. Cardoso said the fall in inflation in June was largely driven by the moderation in energy prices and stability in the foreign exchange market. "Despite these positive developments, members (of the MPC) observed the uptick in month-on-month headline inflation, suggesting the persistence of underlying price pressures, the continued global uncertainties," he said, adding that tariff wars and geopolitical tensions could sustain price pressures. The World Bank has warned that persistently high inflation remains a challenge for Nigeria, urging it to stick to tight monetary and disciplined fiscal policies.
Reuters
7 hours ago
- Reuters
Egypt current account deficit narrows to $13.2 billion in nine months through March
DUBAI, July 22 (Reuters) - Egypt's current account deficit narrowed to $13.2 billion in the nine months through March 2025, from $17.1 billion in the same period a year earlier, Egypt's central bank said on Tuesday. The bank attributed the slimmer deficit to an 86.6% increase in remittances from Egyptians working abroad, as well as a rise in the services surplus due to 23% higher tourism revenue. Oil exports declined by $430.5 million to $4.2 billion, from $4.6 a year earlier, while oil imports increased by $4.8 billion to $14.5 billion, from $9.7 billion. Egypt has been seeking to import more fuel oil and liquefied natural gas this year to meet its power demands after enduring blackouts during periods of shaky gas supply in the past two years. Concerns intensified after the supply of natural gas from Israel to Egypt dropped during Israel's air war with Iran. Suez Canal revenues declined to $2.6 billion, from $5.8 billion in a year earlier, as revenue from the vital global trade route continued to suffer because of Yemeni Houthis' attacks on ships in the Red Sea. The Iran-aligned group says it attacks ships linked to Israel in support of Palestinians in Gaza. Meanwhile, Egypt's tourism revenue reached $12.5 billion from July 2024 through March 2025, compared to $10.9 billion in the same period a year earlier. Remittances from Egyptians working abroad increased to $26.4 billion, from $14.5 billion. Foreign direct investment hit $9.8 billion, compared to $23.7 billion.
Reuters
9 hours ago
- Reuters
Indian fintech firm Paytm swings to profit, expects further boost
July 22 (Reuters) - Indian fintech firm Paytm ( opens new tab swung to a profit for the first time since September 2024, driven by robust growth in its lending business and tight cost controls, and said it expects a further improvement in earnings. The company posted a net profit of 1.23 billion rupees ($14.24 million) for the quarter ended June 30. It had last posted a profit in the September 2024 quarter due to a one-time gain from the sale of its ticketing business. The firm had posted a loss of 8.39 billion rupees in April-June a year earlier after the central bank ordered a shut down of its banking unit in January 2024. Since then, Paytm has increased its focus on core businesses and cut expenses and had projected a profit for the June quarter, when its revenue rose 28% to 19.18 billion rupees. Revenue from financial services, which includes the loan business, doubled year-on-year and that from payment services climbed 18%. Analysts said that Paytm logged strong growth in the merchant lending segments even as growth in personal loans stayed weak amid tightening of credit in the segment. "For personal loans, based on the current trends, there are early signs of recovery," Paytm said. Its expenses fell 19% year-on-year to 20.16 billion rupees during the quarter. Earnings before interest, taxes, depreciation, and amortization before the cost of employee stock options, a key metric, stood at 1.02 billion rupees. Paytm's shares rose 3.3% to a seven-month high before the results. ($1 = 86.3470 Indian rupees)
