1.

Brazil latest information on Inflation rate

Brazil's annual inflation rate increased to 3.14 percent in September 2020 from
2.44 percent in the previous month and above market expectations of 3.03 percent.
It was the highest inflation rate since March, as cost of food & beverages rose to a
near four-year high (11.79 percent vs 8.83 percent in August). Also, prices
advanced further for housing (0.76 percent vs 0.41 percent); personal expenses
(2.55 percent vs 2.50 percent); and communication (3.15 percent vs 2.98 percent).
In addition, cost dropped less for transport (-0.56 percent vs -1.24 percent); and
clothing (-1.90 percent vs -1.99 percent). Meanwhile, prices slowed for health
(1.99 percent vs 3.25 percent); and education (1.01 percent vs 1.14 percent). On a
monthly basis, consumer prices went up 0.64 percent, the most since December
last year, following a 0.24 percent gain in the prior month and compared with
market forecasts of a 0.54 percent rise.
Inflation as measured by the consumer price index reflects the annual percentage
change in the cost to the average consumer of acquiring a basket of goods and
services that may be fixed or changed at specified intervals, such as yearly. The
Lapsers formula is generally used.
 Brazil inflation rate for 2019 was 3.73%, a 0.07% increase from 2018.
 Brazil inflation rate for 2018 was 3.66%, a 0.22% increase from 2017.
 Brazil inflation rate for 2017 was 3.45%, a 5.29% decline from 2016.
 Brazil inflation rate for 2016 was 8.74%, a 0.29% decline from 2015.
In 2019, the inflation rate in Brazil amounted to about 3.73 percent compared to
the previous year, a slight increase from the previous year’s 3.67 percent, but a
large improvement compared to 2015 with more than 9 percent.

Superlative Brazil

Brazil is not only one of the largest countries in the world, it is also one of
the largest economies and a member of the so-called BRIC states, four up-and-
coming emerging economies. Unfortunately, Brazil also struggles due to an on-
going recession; In 2017, the majority of Brazilians described the state of the
country’s economy as “bad”.

The state of Brazil’s economy

Brazil’s mixed economy suffered a severe political and economic crisis in 2014
that only ended in 2016. The country’s GDP slumped dramatically and inflation
skyrocketed. As of today, Brazil has recovered, GDP is on the rise again, and
inflation is below four percent – however, as a result of the recession that saw
millions of job cuts, unemployment is at an all-time high.
 2. Brazil money supply

from causality and integration tests, if monetary aggregates can

anticipate fluctuations in by products and prices in Brazil.
Monthly data, for monetary aggregates, IPCA and real GDP,
from Jan/95 to mar/02 have been used. The broad money
supply was evaluated in their original form in order to
represent financial wealth, weighed by the Division index, as
an attempt for estimating better measures of macroeconomic
liquidity, and adjusted for gathering of the Net Domestic Credit
in primary terms. The results do not indicate that the balance
found using the Division index has contributed to improving
the performance of primary aggregates for the purposes of the
experiment. The broader concepts, stemming from the M3 and
M4, mainly the Net Domestic Credit gathered from the M3,
had shown time antecedence with the real product.
Fluctuations in the prices, in turn, can be anticipated mostly the
financial wealth and liquidity indicators.

Money Supply M1 in Brazil increased to 561970.25 BRL Million in September

from 547162.21 BRL Million in August of 2020

Money Supply M2 in Brazil increased to 3739856.01 BRL Million in August from

3692441.49 BRL Million in July of 2020.
Money Supply M3 in Brazil increased to 7690987.06 BRL Million in August from
7538207.89 BRL Million in July of 2020.
Brazil central bank rate Deposit

In Brazil, deposit insurance is carried out by the Credit Guarantee Fund (FGC) and
the Cooperative Guarantee Fund which are private nonprofit entities established to
manage protection mechanisms for clients of financial institutions in the event of
resolution. 
Looking forward, we estimate Deposit Interest Rate in Brazil to stand at 1.58 in
12 months’ time. In the long-term, the Deposit Interest Rate in Brazil is projected
to trend around 9.76 percent in 2021 and 3.58 percent in 2022, according to our
econometric models.

The FGC are regulated by the National Monetary Council (CMN) and the Central
Bank. CMN Resolutions No. 4,222/2013 and 4,284/2013 consolidate the statutes
and regulation of deposit insurance provided by the FGC and FGCOOP,
respectively.

Both the FGC and FGCoop provide insurance to the following credits: 
• demand deposits or deposits drawable upon prior notice
• savings deposits
• time deposits with or without the issuance of certificate
• bills of exchange
• real estate notes (LH)
• mortgage notes
• real estate credit bills (LCI)
• agribusiness credit notes (LCA); and
• repurchase agreements that have as object securities issued by an affiliated
company after March 8, 2012
• deposits kept in accounts other than checking accounts used for registration and
control of the flow of funds relative to the payment of salaries, compensation,
retirement benefits, pensions and the like.

FGC’s guarantees

FGC’s mandatory member institutions are the universal banks, commercial banks,
investment banks, development banks; credit, financing and investment companies,
real estate credit companies, mortgage companies and savings and loan
associations and the Caixa.

The FGC’s guarantee is up to R$250 thousand for the credits of each creditor—to
be identified by its respective Individual (CPF) or Corporate (CNPJ) Taxpayer ID
—against all member institutions of the same financial conglomerate, which shall
be added together. For a four-year window, there is an additional ceiling of R$1
million per CPF or CNPJ. The ceiling period starts whenever a liquidation or
intervention of a financial institution is decreed by the Central Bank and
precipitates the payment of guarantees by the FGC. Upon expiration of this period,
the ceiling is reinstated. 

It is important to note that the deposits, loans or any other funds raised abroad, the
operations related to programs of governmental interest instituted by law, and
judicial deposits are not covered by the FGC’s guarantee. Other assets not covered
by the FGC’s guarantee are: 
• any financial instrument that contains a subordination clause, licensed or not by
the Central Bank to comprise the regulatory capital of the financial institutions and
other institutions authorized to operate by the Central Bank; 
• credits owned by financial institutions and other institutions licensed by the
Central Bank, private pension entities, insurance companies, capitalization
companies, investment clubs, and investment funds; and 
• credits consisting of shares of investment funds or that represent interests in the
entities referred to in the previous item or in their own financial instruments.

FGCoop’s guarantees
FGCoop members comprise all single credit unions that receive deposits from their
members and two cooperative banks: Bancoob and Banco Sicredi. The FGCoop
ensures equal conditions for competing with commercial banks and protect
member institutions' depositors and investors by guaranteeing deposits up to
R$250 thousand. The credit unions that do not take deposits (the so-called
"capital/loan") are not required to be members to FGCoop.

Funding 

Funds for the insurance provided by the FGC and the FGCoop come from ordinary
contributions from their associated institutions, credit rights subrogated by the
FGC/FGCoop from associated institutions under a resolution regime, income
related to provision of services rendered by the FGC/FGCoop and the earnings
from investments made by them. The FGCoop's income also consists of service
fees charged on the issuance of bad checks, paid directly or indirectly by member
institutions. The fees related to credit unions and cooperative banks that are paid to
the FGC are transferred to FGCoop.

According to the Brazilian Fiscal Responsibility Law, unless stated in specific

legislation, public funds—including those arising from credit operations—must not
be used to rescue member institutions of the National Financial System (SFN).
This prohibition extends to recovery loans or financing that would be aimed at
enabling the transfer of shareholders control.

Currency into circulation in Brazil

The Central Bank of Brazil has released its new 200 real ($37.6) banknote into
circulation, revealing its security features online.
Around 450 million new banknotes, designed by the central bank in collaboration
with the country’s printer, Casa da Moeda do Brazil, will be printed on a cotton
substrate this year.
The central bank has decided to make the new 200 real banknote the same size as
the current 20 real banknote, causing concern the two could be misidentified.
 Interbank Rate in Brazil averaged 8.86 percent from 2005 until 2020,
reaching an all-time high of 16.05 percent in January of 2006 and a record low of
0.89 percent in March of 2016. This page provides - Brazil Interbank Rate-
actual values, historical data, forecast, chart, statistics, economic calendar and
news.

 The R$1 note can reach a value of R$100 for banknote collectors
because it is no longer printed and is rarely seen in circulation.
 There are still 150 million R$1 coins in circulation.
 Brazil has other coins apart from the real. There might be up to 81
different currencies that complement the economy of the country, recognized
by the Central Bank of Brazil, which have been minted by community banks
in order to simulate the economy in some regions such as São Paulo or Río de
Janeiro.
 Brazil has changed currency at least 8 times in just 50 years.
 The most modern reais banknotes, in circulation since 2010, have
different sizes and are printed with different technologies that guarantee their
authenticity.

The Brazilian Currency

In July 1994, following nearly two decades of persistent high inflation and
hyperinflation cycles, the Brazilian people was introduced to a new
currency, the Real. Since then Brazil's economy works with a sound
currency. Nowadays, cash held by population reaches 277 billion reais (July
2020). Despite an increasing use of digital transfers, payments in cash are
customary and the majority of the population — especially in the
countryside — collect their wages in cash.
 Managing the currency services to the public — its issuance, distribution
and counterfeiting prevention — is a key function of the Banco Central do
Brasil (BCB) . The Brazilian Mint ('Casa da Moeda do Brasil'), in charge of
printing Brazilian money for more the 300 years, meets the Central Bank's
requirements about the Real's design and quality issues of banknotes and
coins.
 In order to guarantee the Real's safety and functionality, the state-of-the-art
in money-design and printing technologies is necessarily employed.
Actually, the Brazilian Real banknotes are one of the safest sets in the world,
having advanced security features: watermark, magnetic security thread,
 latent image, see-through register, tactile intaglio printing, optically variable
magnetic ink and hologram stripe.
 Following the cash manufacturing, banknotes and coins may be put into
circulation, exclusively by the Central Bank, as Brazilian economy grows,
prices rise and payments habits change. It is also required to replace
periodically damaged notes and coins. 
 There are several stages in the banknotes and coins' journey from the
producers to people's pockets. First, they are sent to the Central Bank to be
imprinted with the signatures of the Minister of Economy and the Bank's
Governor. Next, the currency is delivered—under an outsourcing scheme—
to 'Banco do Brasil', a state-controlled commercial bank. From then on, the
custody, distribution of fresh currency to other financial institutions and
currency recirculation is performed by Banco do Brasil, which also helps the
Central Bank to collect worn-out and counterfeit notes for destruction,
exclusively by the monetary authority.