BRASÍLIA - Brazilian Central Bank other major economies such as China, try a series of measures to tame to rapid credit growth and prevent inflationary pressures, accession, expand to contain the rising prices and capital inflows react quickly rolled out.
Brazil's President Henrique Meirelles Central Bank policies announced said Friday, who want to withdraw some 61 billion Brazilian reais ($ 35.88 billion) from the financial system, have an impact on inflation and economic activity and would be felt in interest rates.
Access thousands of business sources on the free Web not available. More informationThe announcement comes as Brazil's Central Bank of monetary policy Committee prepares to meet next week to decide whether you the country reference Selic interest rate currently at 10.75% annually set to change. It is Mr. of Meirelles's last rate setting session so, as he is early next year step down to make way for Alexandre Tombini, a career central bankers of President Dilma Rousseff named. Some see the announcement of the as a first step towards a more aggressive policy stance against inflation.
"These measures cut liquidity in the market and prevent the formation of bubbles and risks that could be negative for the future health of the economy," said Mr Meirelles.
Economists say the strong growth of Bank lending is one of the key factors, the Brazilian domestic demand has been driving and the higher prices has fed by. IPCA consumer price index inflation was 5.5% in the 12 months to mid November, on the country's year-end target of 4.5%.
As China is Brazil takes measures to prevent that its economy although Latin America largest economy, now starts overheating on that path. Friday's China, announced that it a "prudent" monetary policy next year, a move would shift that the change of priorities from total economic growth towards the inflation formalised the Government.
A similar sound striking, the reserve said Brazilian Finance Minister Guido Mantega request measures curb helps excessive credit expansion in a time of robust economic growth for the country's economy.
"Availability of loans has increased significantly and these measures will reduce something," said Mr Mantega. "Could be some increase in interest rates on loans as a result."
The Brazilian stock exchange retreated to the messages, with investors sell local assets, particularly in the financial field.
The Central Bank said it would reserve requirements to increase deposits from 15% to 20% and to increase its additional requirements deposits from 8% to 12% term and cash. It raised capital requirements for loans to individual consumers that are longer than 24 months by 150% from 100%.
Earlier in this year, Mr Meirelles proposed changes to requirements to reserve have no direct influence on decisions on interest rates, but he appeared to reverse this attitude Friday, raising expectations that higher interest rates might be likely, as the new Government in the new year takes.
"As we have seen in the past year, central banks have been often reserve requirements with, as the first step towards tightening torque, and such hikes have almost universally followed by policy interest rate increases,.", said win thin, global head of emerging markets strategy at Brown Brothers Harriman in New York.
Write toGerald Jeffris at the gerald.jeffris@wsj.com
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