Brazil Bank Interest Rates Hit 8-Year High

The average interest rate charged by banks for operations with individuals and companies reached 46.7% per year in November. This represents an increase of 0.6 percentage points compared to the previous month. The Central Bank released these figures on Friday, noting that this is the highest level observed since April 2017, when the rate stood at 48.3%.

So far in 2025, the average interest rate has advanced six percentage points. The calculation is based on free resources, meaning it does not include the housing sector, the rural sector, or the National Economic and Social Development Bank (BNDES). The data highlights a significant tightening of credit costs for the Brazilian economy.

According to the Central Bank, the trajectory of interest rates diverged between corporate and personal lending in November. The average rate for operations with companies decreased from 25.1% per year in October to 24.5% per year in November.

Conversely, rates for operations with individuals increased. They rose from 58.5% in October to 59.4% in November. This level is the highest recorded since August 2017, when the rate was 62.3%. The increase in personal lending rates contributes significantly to the overall rise in the average banking rate.

The increase in banking interest rates is occurring in the context of a high basic interest rate environment. The Selic, set by the Central Bank to contain inflation, was maintained at 15% per year in December. This represents the highest level in nearly 20 years.

The high benchmark rate generally exerts upward pressure on the rates charged by financial institutions for loans and financing to consumers and businesses.

Specific consumer credit products also saw significant changes in November. The interest rate for the special check (cheque especial) rose from 139.1% in October to 141.7% in November.

Additionally, the average interest rate for credit card revolving operations increased from 439.8% to 440.5%. This rate remains at a prohibitive level, being the most expensive line of credit in the financial market. The increase happened despite a rule established by the National Monetary Council (CMN) in January 2024, which limits the total debt value on revolving credit cards to 100% of the original debt amount. However, the cost of the Financial Operations Tax (IOF) is excluded from this calculation.