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Montevideo, September 22nd 2018 - 13:27 UTC

Recession biting in Brazil: record net savings withdrawals in January

Friday, February 5th 2016 - 08:27 UTC
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Brazilians withdrew 161.59 billion Reais (some $41.52 billion) and deposited 149.56 billion Reais (around $38.43 billion) last month. Brazilians withdrew 161.59 billion Reais (some $41.52 billion) and deposited 149.56 billion Reais (around $38.43 billion) last month.

Net savings withdrawals in Brazil rose to a record high in January, with deposit outflows exceeding inflows by 12.03 billion Reais (some $3.09 billion), the Central Bank said Thursday.

 Brazilians withdrew 161.59 billion Reais (some $41.52 billion) and deposited 149.56 billion Reais (around $38.43 billion) last month.

The net outflow of savings deposits rose to its highest point since the Central Bank began keeping track in 1995.

The 648.64 billion Reais (some $166.69 billion) deposited in savings accounts in Brazil yielded 4.08 billion Reais (some $1.05 billion) in interest last month.

In 2015, Brazilians' savings account withdrawals exceeded deposits by 53.57 billion Reais (roughly $13.39 billion), an annual record.

The net savings withdrawals are due in large part to the high level of Brazil's benchmark SELIC interest rate (currently 14.25%), which encourages investors, who earned 8.07% interest in savings accounts last year, to seek higher yields in other fixed-income investments.

The net outflow of savings deposits also has been attributed to Brazil's recession and high inflation and joblessness, which have forced Brazilians to withdraw money for basic expenses.

Categories: Economy, Brazil.

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