Brazil’s Central Bank on Monday took steps to guarantee liquidity to the nation’s banks and financial markets, loosening reserve requirements and creating new credit lines. The bank cut reserve requires for banks on term deposits from 25% to 17%, saying the measure will free up some R$68 billion for fresh business and consumer lending. The Central Bank also announced new lines of credit for member banks, allowing banks to borrow from the Central Bank using debentures holdings and drawing rights from a government-controlled guarantee fund as collateral. Those measures could add as much as R$1 trillion in liquidity to financial markets, the bank said. The measures are designed to float Brazilian financial institutions and markets during the expected economic downturn due to the spreading coronavirus.
Link to government news agency release
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