In her remarks broadcasted on radio and television to celebrate Labor Day, Brazil’s president Dilma Rousseff urged private banks to increase efforts to reduce interest rates charged on loans, credit cards and overdrafts. And she advised Brazilian consumers and businesses to seek banks that offer the lowest rates.

“It is unacceptable that Brazil, which has such a robust and profitable financial system, continue with one of the highest interest rates in the world. These rates can not remain so high. Brazil’s economy today does not justify it. The banks can not keep charging the same interest rates for businesses and consumers while the Selic base rate is down, the economy is stable and the overwhelming majority of Brazilians honor their commitments with promptness and honesty,” said Dilma.

For the President, with the lowering of the basic interest rate and the stable inflation, private banks have no arguments to explain the still high rates charged to customers. “Obviously, the financial sector can not explain this perverse logic to Brazilians. The Selic rate is low, inflation remains stable, but the rates on overdrafts and credit cards are not coming down.”

In order to put some pressure on private banks, the President counts on the pressure put by the clients themselves, which would stimulate competition between banks. “It’s also good that you, the Brazilian consumer, make your rights prevail by choosing institutions that will offer the best rates,” she said.

Rousseff is hoping that private banks will follow the same footsteps of public banks, which reduced the rates on consumer loans and overdraft charges. “Caixa Economica Federal and Banco do Brasil chose the path of good example and healthy market competition, proving that it is possible to lower the interest charged on consumer loans, credit cards, overdrafts, and payroll.” According to her, only when local interest rates reach international levels, Brazil’s economy “will be fully competitive.”

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