Brazil's default rate falls for first time in 2009

Brazil's default rate has fallen for the first time this year, from 5.9 percent in August to 5.8 percent in September, the Central Bank said on Tuesday.

The bank counts payment over 90 days later than scheduled as default.

The default rate had been increasing steadily in the past few months due to the international financial crisis.

Experts see the fall as indicating that the credit sector of the country is beginning to recover from the crisis.

In September, personal default rate fell for the third consecutive month, down from 8.4 percent to 8.2 percent, according to Central Bank data, to post a low since the 8.0 percent registered in December 2008.

Corporate default rate increased for the 10th consecutive month in September, up from 3.9 percent to 4.0 percent.

It was the highest since the 4.2 percent registered in May 2001. In September 2008, the corporate default rate was 1.6 percent.

Brazil's Central Bank also reported that the interest rates charged for personal loans in the country were now at the lowest since the Real Plan was first adopted in July 1994.

The interest rates fell 0.5 percentage points to 43.6 percent in September.

The annual interest rates charged for corporate loans were 0.1 percentage points lower to stand at 26.3 percent in September, the Central Bank said Tuesday.

Central Bank data also showed that taxs had been reduced to 35.3 percent, the lowest since December 2007.

The bank spread, the difference between what it costs banks to obtain money and what they charge to lend it, fell from 17.8 percent to 17.7 percent for companies and from 34.3 percent to 33.4 percent for families.

Loan maturity for corporate entities has increased from 259 to 264 calendar days, whereas the maturity for personal borrowers had increased from 498 to 506 days.

The bank data showed that total credit transactions in September reached 1.347 trillion reais (778.6 billion U.S. dollars), up 1.5 percent from August.

The amount represented 45.7 percent of the country's GDP, up from 45.3 percent in August.

In the first nine months of 2009, credit transactions have accumulatively increased 9.8 percent from the same period in 2008, despite the effects of the international financial crisis.

In the October 2008 to September 2009 period, credit revenues in Brazil grew 16.9 percent compared with the previous 12-month period.

Source:Xinhua