b -a chamber of commerce of florida (baccf) … · 2020-06-26 · emerging markets: monetary...
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BRAZILIAN-AMERICAN CHAMBER OF COMMERCE OF FLORIDA (BACCF)
ECONOMIC CHALLENGES IN TIMES OF CRISIS
1
June 26, 2020
ROBERTO CAMPOS NETO
Presidente do Banco Central do Brasil
0
-20
-40
-60
-80
-100
Crise Global (08/09/08)
Taper Tantrum (17/05/13)
China Scare (26/07/15)
Covid-19 (21/01/20)
0 D+15 D+30 D+45 D+60 D+75 D+90
Source: IIF
Capital Outflows – Non ResidentsGlobal Shock
Emerging Economies
2
US$
bil
lio
n
Accumulated balances since the informed date
Source: Central banks of Chile, Colombia, Peru and Mexico, Bloomberg, IIF
Capital Outflows – Non ResidentsGlobal Shock
Emerging Economies
3
Recent accommodation, but accumulated outflow in the year is still substantial
*Resized by the share of each country prior to the exit episode
Brazil
Hungary
India
Czech rep.Turkey
Indonesia
Colombia
Poland
Singapore
Peru
Korea
Mexico
Ukraine
Chile
-10
-8
-6
-4
-2
0
2
4
6
8
-10 -8 -6 -4 -2 0 2 4 6 8
Portfolio outflows – non residents*
Po
rtfo
lio o
utf
low
in 2
008
:Q3
and
Q4
, in
% o
f th
e b
ala
nce
in 2
008
:Q2
Portfolio outflow in 2020:Q1, in % of the balance in 2019:Q4 -2.70
0.83
-0.35 -0.59
Brazil Chile Colombia Mexico
23-Mar
-33,8
22-Jun
-16,9
-40
-30
-20
-10
0
17-Jan 12-Feb 9-Mar 4-Apr 30-Apr 26-May 21-Jun
Bloomberg Capital Flow Index - EMEs (%)
Flows to investment funds* tend to usual levels
Source: Commerzbank, EPFR
Normalization of investments
4
Global Shock
Recovery Signs
*- Four weeks moving average in yellow.
shar
e u
nd
er
man
age
me
nt
(pp
. ch
ange
)
Source: Deutsche, Gavekal
Mobility
5
Gradual reduction in social distancing at uneven paces across countries
NorwayDenmarkSwitzerlandSwedenNew ZealandUSAustraliaEurozoneCanadaUK
GermanyGreeceFinlandFranceAustriaNetherlandsItalyBelgiumPortugalSpainIrelandIsraelCzech RepPolandHungarySouth AfricaTurkey
South KoreaVietnamHong KongTaiwanJapanThailandIndonesiaIndiaMalaysiaSingaporePhilippinesBrazilMexicoColombiaArgentinaChile
G1
0Eu
rozo
ne
CEE
MEA
Asi
aLa
tam
|15-Feb |15-Mar |15-Apr |15-May
0: reference level
Goo
gle
Res
iden
tial
Mob
ility
GD
P 20
Q1
(t/t
-1)
Global Shock
Recovery Signs
Feb/29 07 14 21 Mar/28 04 11 18 Apr-25 02 09 16 23 May/30 Jun/06
Google Residential Mobility (difference from reference)
US Germany Italy Brazil India
Source: Bloomberg
USA: Economic Activity
6
Strong decline led by sharp fall in consumption
Global Shock
Global Economy
Real GDP
06q3 08q4 11q1 13q2 15q3 17q4 20q1
pp
. an
d %
(Q
oQ
an
nu
aliz
ed)
Consumption
Net Exports
Investment
Government
Change in stocks
GDP (QoQ)
Source: NBS and Bloomberg
China: Economic Activity
7
Global Shock
Global Economy
16
-Ma
y
Sep
17
-Ja
n
Ma
y
Sep
18
-Ja
n
Ma
y
Sep
19
-Ja
n
Ma
y
Sep
20
-Ja
n
Ma
y17-M
ay
Au
g
No
v
18-
Feb
May
Au
g
No
v
19-
Feb
May
Au
g
No
v
20-
Feb
May
16
-Ma
y
Sep
17
-Ja
n
Ma
y
Sep
18
-Ja
n
Ma
y
Sep
19
-Ja
n
Ma
y
Sep
20
-Ja
n
Ma
y
Faster economic recovery on supply side
Ret
ail s
ales
(%
y/y
)
Ma
nu
fact
uri
ng
(% y
/y)
dif
fusi
on
ind
ex ex car sales: - 3.5% in May
Source: Bloomberg and central banks.
EMEs: Economic Activity
8
Strong revisions of growth expectation
Global Shock
Emerging Economies
Chile Colombia Mexico Peru S. Africa
Chile Colombia Mexico S. Africa
Chile Colombia Mexico Peru S. Africa
BBGWBOECD
20 21
GDP growth Revision of expectations
GD
P G
row
th(%
Q/Q
–s.
a.)
GD
P f
ore
cast
s(%
y/y
)
2
-2
-6
-10
2
4
0
-2
-4
-6
8
4
0
-4
-8
-12
Source: Bloomberg and central banks.
EMEs: Economic Activity
9
Indicators show additional deterioration on 20q2.
2020JanFebMarApr
Brazil Chile Colombia Mexico S. Africa
Ret
ail s
ales
(%
y/y
)
2020JanFebMarApr
Brazil Chile Colombia Mexico S. Africa
Ma
nu
fact
uri
ng
(% y
/y)
2020JanFebMarAprMay
Brazil Colombia Mexico S. Africa
PMI Manufacturing
Global Shock
Emerging Economies
Emerging Markets: monetary conditionsGlobal Shock
Emerging Economies
10
jun 19 aug 19 oct 19 dec 19 feb 20 apr 20 jun 20
8
6
4
2
0
%
Brazil Chile Colombia Mexico Peru S. Africa
Policy rate
0
2
4
6
8
10
12
S. Africa(govnt. bonds)
Chile(BCCh bonds)
Chile(banks' bonds)
Colombia(govnt. bonds)
Colombia(banks' bonds)
Turkey(govnt. bonds)
Announced or authorized Executed
8.58.0
1.1
2.7
11.3
0.0
2.33.3
6.0
1.1
2.3
7.7
Asset purchases
3.75
5.50
2.752.25
0.500.25
US$
bil
lio
n
Monetary policy easing, and programs of asset purchases.
Source: BIS, Bloomberg, SARB, PBoC, Banxico, BCR, Banrep, BCCh, BRP. CBRT.
Brazil: Impact of Covid-19
11
Preliminary retail data indicate some recovery, except for services. Focus survey point to a strong decline in activity for 2020.
Retail sales – Cielo* Focus expectations – Growth for 2020
AverageMedianPercentiles 25% and 75%
Source: BCB, Focus (06/19/2020)Source: Cielo
Shock on activity
Domestic Economy
%
%
*Change in revenues in relation to the same days of Feb/20, with calendar adjustments.
-80
-70
-60
-50
-40
-30
-20
-10
0
1001 - 28 29 - 02 03 - 30 31-06 07-13 14 - 20
Mar Apr May Jun
Total Retail Non-Durables Durables Services
1.0
0.0
-1.0
-2.0
-3.0
-4.0
-5.0
-6.0
-7.0
-8.0
12
Source: CCEE
Shock on activity
Domestic EconomyBrazil: Impact of Covid-19
Electricity consumption by manufacturing industry (free market)Percentage change regarding 09-13 March
- Electricity comsumption – Moving average of 5 working days.- Highlighted values refer to the change observed in the last day (June 10th).
Uneven paths of fall and recovery among sectors of manufacturing industry
May May01 Mar 01 April 01 May 01 Jun 01 Mar 01 April 01 May 01 Jun
200
0
-200
-400
-600
-800
-1000Apr Apr Apr Apr Apr
2016 2017 20202018 2019
Monthly Quarterly moving average
112,5
-203,3
-932,0
-344
All data are seasonally adjusted. Sources: Ministry of the Economy and BCB
13
70
80
90
100
110
120
130
140
150
160
Apr-16 Apr-17 Apr-18 Apr-19 Apr-20
Consumers ManufacturingServices BuildingRetail
Confidence indicators
Apr/16= 100Jun/2020= preliminary, except for Consumer and Building Confidence
Widespread effect on the economy
Brazil: Impact of Covid-19
*2002 = 100
IBC-BR*Employment - Caged
Net job creation (thousands)
115
120
125
130
135
140
Apr-16 Apr-17 Apr-18 Apr-19 Apr-20
Monthly Quarterly moving average
April/2020Montly change: -9.73%Apr20/ Apr19: -15.09%
Shock on activity
Domestic Economy
14
GDP 2020:Q1 shows a sharp drop in activity
GDP – Seasonally adjusted
Source: IBGE
160
162
164
166
168
170
172
174
2015
:1T
2015
:3T
2016
:1T
2016
:3T
2017
:1T
2017
:3T
2018
:1T
2018
:3T
2019
:1T
2019
:3T
2020
:1T
-1.5%2020:Q1 compared to 2019:Q4
GDP 2020:Q1(supply)
GDP 2020:Q1(demand)
GDP Agriculture Manufacturing Services
-1.5
0.6
-1.4-1.6
-1.5 -2.0
0.2
3.1
-0.9
2.8
2015
:Q1
2015
:Q3
2016
:Q1
2016
:Q3
2017
:Q1
2017
:Q3
2018
:Q1
2018
:Q3
2019
:Q1
2019
:Q3
2020
:Q1
Shock on activity
Domestic EconomyBrazil: Impact of Covid-19
%Q/Q-1
%Q/Q-1
Source: FED, ECB, Bloomberg
Pandemics: risk perception
15
Global Shock
Global Markets
*Number of countries with daily growth of new cases higher than 5%; sample of 105 countries.
New Covid-19 cases* vs. VIXRisk Appetite
(right)
-4
-3
-2
-1
0
1
Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20
stan
dar
d d
evi
atio
nfr
om
the
me
an
Advanced Economies Emerging Markets
12
30
48
66
84
0
25
50
75
100
Feb-20 Mar-20 Apr-20 May-20 Jun-20
# Countries
VIX
16
Capital flows and local currency were severely affected in Brazil
External Problems + Domestic SituationGlobal Shock
Domestic Markets
FX Change YTD against USD%
Capital Flows
US$ bn
Source: Bloomberg, 06/24/2020Source: Nacional Accounts/BCB, 06/18/2020
-25
-20
-15
-10
-5
0
5
10
2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 0
jan feb mar apr may jun
Equities Bonds 2019 2020
Source: Bloomberg, BCB
Local Assets Performance
17
GFC vs. Covid-19
T0 → GFC: 15/09/2008; Covid: 12/02/2020
Covid-19GFC
BCB Interventions (US$ mi)
Global Shock
Domestic Markets
T0: Index = 100
80
90
100
110
120
130
140
T-40
T-20 T0
T+2
0
T+4
0
T+6
0
T+8
0
T+1
00
T+1
20
T+1
40
T+1
60
T+1
80
T+2
00
T+2
20
T+2
40
USDBRL
GFC COVID-19
50
60
70
80
90
100
110
120
130
T-40
T-20 T0
T+2
0
T+4
0
T+6
0
T+8
0
T+1
00
T+1
20
T+1
40
T+1
60
T+1
80
T+2
00
T+2
20
T+2
40
Ibovespa
GFC COVID-19
T0: Points = 0
-100
0
100
200
300
400
T-40
T-20 T0
T+2
0
T+4
0
T+6
0
T+8
0
T+1
00
T+1
20
T+1
40
T+1
60
T+1
80
T+2
00
T+2
20
T+2
40
CDS
GFC COVID-19
T0: Index = 100
Source: B3
Ibovespa Flows
18
Investors’ reaction
Global Shock
Domestic Markets
-150
-100
-50
0
50
100
150
0
20
40
60
80
100
120
140
Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20
Milh
õe
s
Ibovespa Foreigners Individuals Institutionals
BRL bn000´s points
Source: BCB
External accountsGlobal Shock
Domestic Economy
19
Capital outflows will accommodate and external accounts will improve
Current account
Accumulated in 12 monthsJune 2020 = forecast
Direct investment in the country
Accumulated in 12 monthsJune 2020 = forecast
Current account
Decomposition
US$ Billion
US$ billion (left)
Jan-May 20
Direct investment abroad
% GDP (right)
US$ billion (left)
% GDP (right)
Jan-May 19
-3,0
-2,5
-2,0
-1,5
-1,0
-0,5
0,0
-55-50-45-40-35-30-25-20-15-10
0,0
1,0
2,0
3,0
4,0
5,0
60
65
70
75
80
85
-7
-5
-3
-1
1
3
5
Balance of goods
Travel
Operating leasing services
Transport
Dividends
Interest
Other
19,719,0
15,114,3 14,1 14,0 13,7
13,1
11,411,0 10,7 10,4
9,8 9,6
7,3 7,2 7,06,3 5,9
5,0 5,04,4 4,2 4,1 4,0 4,0
3,1 2,9
0
10
20
Fiscal Response
20
% GDP
Comparative vision
Source: IMF, UN and BCB. Updated to 11/06. Data include credit guarantees.
Global Shock
Facing the crisis
Source: FED, ECB, BoE and BCB
Fiscal Response
21
Current responses shall surpass that of the GFC – WEO projections for 2020
Global Shock
Facing the crisis
Note: Values within bracketsrepresent expected increasein gross public debt in 2020compared to 2019.(in pp. of GDP)
Japan (+14.5)
Italy (+20.8)
US (+22.1)France (+16.9)
Spain (+18.0)UK (+10.3)
Canada (+20.9)
Germany (+8.9)
Australia (+14.3)
South Korea (+5.0)
Denmark (+8.0)
Netherlands(+10.0)
Gross public debt (% GDP)
Ne
t p
ub
lic d
eb
t (%
of
GD
P)
Source: Fed, BOJ, Bloomberg, Thomson Reuters
Central banks’ response
22
Programs result in large injection of liquidity into financial systems
Global Shock
Facing the crisis
Fed ECB
Announced Implemented*
* Feb 24th / Jun 15th 2020
LSAP = Large-Scale Asset PurchaseMLF = Municipal Liquidity FacilityMBSPP = Mortgage-Backed Securities Purchase ProgramPMCCF = Primary Market Corporate Credit FacilitySMCCF = Secondary Market Corporate Credit FacilityCPFF = Commercial Paper Funding Facility
DWL = Discount window lendingPDCF = Primary Dealer Credit Facility MMLF = Money Market Mutual Fund Liquidity FacilityTALF = Term Asset-Backed Securities Loan FacilityMSLP = Main Street Lending Program PPPLF = Paycheck Protection Liquidity Facility
PEPP= Pandemic Emergency Repurchase ProgramAPP = Asset Purchase ProgramsLTRO = Long Term Refinancing Operations PELTRO = Pandemic Emergency Refinancing OperationsTLTRO III = Targeted Long Term Refinancing OperationsLiq. USD = Liquidity in US$
Source: FED, ECB, BOJ and Bloomberg
Central banks’ response
23
Sharp balance sheets expansion
Central banks balance sheets
Bank of Japan
European Central Bank
Federal ReserveUSA
Global Shock
Facing the crisis
Change (pp. GDP)2020 2008-13
until march
Credit
Others
Room for conventional policies
24
Brazil: cautious MP actions
Source: Bloomberg
15
10
5
0
Real Public Spendingyoy % change
12.4%
pre-cap interest rate
5.3%
post-cap interest rate
04 06 08 10 12 14 16 18 20*
Source: BCB, 2020 forecast
Structural Interest Rate Reductions1 year rate
Macroeconomic Outlook
Monetary Policy
0
4
8
12
16
Government Expenditure Cap
Social Security
0
2
4
6
8
10
12
Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20
Yie
ld (p
.p)
Brazil Mexico Russia Chile
South Africa Peru Colombia India
Room for conventional MP
25
Part of EMEs faces policy constraints
Net public debt2019
Five years yield
High debt: relevant risk factor
Source: Bloomberg
Macroeconomic Outlook
Monetary Policy
Fonte: IMF, Standard & Poor’s
70
60
50
40
30
20
10
0
26
Monetary Policy
• In its last meeting, the Copom unanimously decided to lower the Selic rate by 0.75percentage point to 2.25% p.a.
• The Copom believes that the current state of affairs continues to recommend an unusuallystrong monetary stimulus, but it recognizes that the remaining space for monetary policystimulus is uncertain and should be small.
• For the next meetings, the Committee sees as appropriate to evaluate the impact of thepandemic and of the set of credit and transfer programs in place and foresees that anypossible adjustment to the monetary stimulus would be residual.
• The Committee recognizes that the variance of its balance of risks has increased and thatfurther information on the evolution of the pandemic, as well as a decline in fiscaluncertainty, will be essential to determine its next steps.
Macroeconomic Outlook
Domestic Economy
The roles of monetary and fiscal policiesMacroeconomic Outlook
Domestic Economy
27
Monetary and fiscal policies have well-defined roles
SolvencyFiscal Policy
If not properly managed, liquidity problems can become solvency problems.
LiquidityMonetary Policy
SummaryMeasures’ impacts
28
Source: BCB¹Potencial impact on credit provision.* Credit operations volume potentially benefited by the measure.** New measures.
0
100
200
300
400
500
600
700
800
ReserveRequirements
GuaranteedFinancial Letter
New DPGE Loans backed bydebentures
Debtrenegotiations
Credit line tofinance SME's
payroll
FX overhedge ofequity abroud
Reduction ofCapital
ConservationBuffer
Capital relief forSME credit
Central Bank of Brazil Response
29
Source: BCB
Potential Implemented
Liquidity support and capital relief
BRL billion
Global shock
Facing the crisis
Capital relief
BRL 3.2 trillion
Emerging Markets EconomiesCovid-19 Measures -Comparative overview
30
Covid-19 Outbreak
Facing the crisis
Liquidity Support(% of GDP)
Credit Support(% of GDP)
Source: FSB/BCB – until June 23th
20.0% Brazil17.5% Brazil
Source: Cetip
Non-banking fundingPrivate bonds
Domestic EconomyDebentures outstanding fell more than other non-bank assets issued
198.8 (423)
35.4 (42)
24.4 (76)
37.2 (45)
3.6 (48)
-20
0
20
40
60
80
100
120
140
160
180
200
220
Jan2016
Apr Jul Oct Jan2017
Apr Jul Oct Jan2018
Apr Jul Oct Jan2019
Apr Jul Oct Jan2020
May
BRL billion Non-bank fund rasing outstanding– accumulated growth
Debentures Real Estate Receivables Certificates (CRI) Agribusiness Receivables Certificates (CRA) Commercial notes Others
March-May 2019 March-May 2020
Debentures 28.6 -10.4
CRI -0.7 -0.3
CRA 3.7 -1.1
Commercial Notes -1.2 15.2
Others 0.6 3.1
Total 30.9 6.5
Accumulated outstanding growth (BRL billions)Asset
31
32
Debentures Trading on the Secondary MarketTrading volumes and spreads of the top 100 negotiated debentures are close to pre-Covid19 crisis level. Higher risk debentures still trade at higher spreads.
Source: B3, Cetip
228
190
351
1331,0
2,5
1,9
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
4,0
0
250
500
750
Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20
R$ million Debentures AA - ATop 100 Daily volume, average volume and spread
Daily Volume Average Volume (20 days) Spread (right)
p.p.
93
196
69
1,3
3,7
3,2
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
4,0
0
250
500
750
nov/19 dez/19 jan/20 fev/20 mar/20 abr/20 mai/20 jun/20
R$ million Debentures B – C – DDaily volume, average volume and spread
Daily Volume Average Volume (20 days) Spread (right.)
p.p.
* Data until June 23rd 2020.
Private bonds
Domestic Economy
Nonearmarked new credit transactions
33
Increase in credit to firms amid the crisis
* Not including overdraft and credit card. Weekly data, accumulated over the last five working days, up to June 5th
Source: BCB
0
10
20
30
40
50
60
1 3 5 7 9 11 13 15 17 19 21 23
BR
L b
illio
n
Weeks
Effects of measures
Credit Distribution
Households*Business*
2020 2019
0
5
10
15
20
1 3 5 7 9 11 13 15 17 19 21 23
BR
L bi
llio
n
Weeks
Average interest rates: new credit transactions
34
Nonearmarked credit (% p.y.)
discount of trade billsworking capital up to 365 daysworking capital over 365 daysguaranteed overdraft accounts (right)
payroll-deducted personal loans -totalvehicles financingpersonal credit (right)
% % Households% %
Source: BCB
Effects of measures
Credit Cost
Business
25
27
29
31
33
35
37
39
41
43
8
10
12
14
16
18
20
22
24
Jan/18 May/18 Sep/18 Jan/19 May/19 Sep/19 Jan/20 May/20 70
80
90
100
110
120
130
19
20
21
22
23
24
25
26
27
Jan/18 May/18 Sep/18 Jan/19 May/19 Sep/19 Jan/20 May/20
New transactions and credit renewals
35
From March 16th to June 12th
Source: BCB
S1 = large banks, separated by public and private sector
S2 = medium banksS3 and S4 = small
banks
◼ S1 – public ◼ S1 – private
New transactions
(1) Includes debentures totaling BRL 30.3 billions. (2) Includes: full renewal of the credit operation, including new credit; as well as renegotiations with changes in interest rate and guarantees.
Credit renewals Total
Effects of measures
Credit Distribution
Corporate Middle SME Household Total Corporate Middle SME Household Total
S1 - public 31.6 11.2 14.8 61.0 118.7 7.7 16.2 20.7 50.2 94.8
S1 - pivate 169.8 28.8 27.9 55.6 282.1 77.6 15.3 8.2 26.8 128.0
S2 31.7 5.1 1.1 12.2 50.0 3.7 0.4 0.1 0.2 4.3
S3 32.2 10.2 2.4 16.7 61.6 10.7 2.0 1.0 5.3 19.1
S4 8.8 6.0 1.4 4.5 20.8 1.7 3.2 0.2 2.7 7.8
Total 274.2 61.3 47.7 150.1 533.2 101.4 37.1 30.1 85.3 253.9
BRL billions
SegmentsNew transactions (1) Credit renewals (2)
Debt renegotiation: operations that had installments extended after the new CMN and BCB’s regulation
36
From March 16th to June 12th
Source: BCB
Extension of loan installments, with the same interest rate – values in BRL billions
Number of contracts Value of operations extended Value of installments extended
◼ S1 – public ◼ S1 – private
Effects of measures
Credit Distribution
Number of
contracts
Value of
operations
Install-
ments
value
Number of
contracts
Value of
operations
Install-
ments
value
Number of
contracts
Value of
operations
Install-
ments
value
Number of
contracts
Value of
operations
Install-
ments
value
Number of
contracts
Value of
operations
Install-
ments
value
S1 - public 858 9.3 1.4 10,517 15.5 3.4 476,552 31.4 6.9 3,392,363 248.5 17.4 3,880,290 304.8 29.0
S1 - pivate 4,514 24.6 9.9 99,987 23.7 7.7 600,942 35.3 4.6 4,957,111 103.3 8.3 5,662,554 186.9 30.5
S2 1,096 16.0 1.3 10,222 87.5 7.1 43,755 1.1 0.1 1,058,361 22.0 1.3 1,113,434 126.5 9.9
S3 982 2.2 0.7 39,546 7.5 1.2 11,209 1.2 0.1 144,432 8.7 3.7 196,169 19.6 5.7
S4 330 0.6 0.3 57,139 6.1 2.9 6,589 1.5 0.3 79,948 2.9 0.2 144,006 11.0 3.7
Total 7,780 52.6 13.5 217,411 140.3 22.3 1,139,047 70.5 12.0 9,632,215 385.3 30.9 10,996,453 648.8 78.8
Seg-
ments
Corporate Middle SME Household Total
PESE – Emergency Employment Support Program
37
Effects of measures
Credit DistributionThe program* strongly benefits low wage employees in the whole country
* Data updated up to 06/19/2020** Preliminary values reflecting potential demand based upon pre-crisis data (subject to future revision)
Geografic Distribution Wage Distribution Program enhancement – MP 944/20
1) To include firms with higher revenues in 2019: R$ from 10 to R$ 50 millions.
2) Extension of the program by 2 month.
3) Credit to firms keeping at least 50% of their employees.
Expected additional impact:**
1) R$ 5 billion: additional months to currently eligible firms;
2) R$ 5 billion: extension to new firms.
Total program:**
R$ 15.5 billion
em
plo
yee
s (i
n th
ou
san
ds)
0 – 1 1 – 1,5 1,5 – 2 2 – 5 5+minimum wages
employees funded firms amount financed
38
INCLUSION COMPETITIVINESS
TRANSPARENCY EDUCATION
COMPETITIVENESS TRANSPARENCY EDUCATIONINCLUSION
TRANSPARENCY OF MONETARY POLICY
COOPERATIVE CREDIT
MICROCREDIT
CURRENCY CONVERSIBILITY
INITIATIVES FOR CAPITAL MARKET (IMK)
INNOVATION
MARKET EFFICIENCY
INTERNATIONAL RESERVES
RURAL CREDIT
HOUSING CREDIT
RELATIONSHIP WITH CONCRESS
FINANCIAL EDUCATION
COMMUNICATION PLAN FOR BCB ACTIONS
RELATIONSHIP WITH FOREIGN INVESTORS
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Availability
Speed
Convenience
Open environment
Various use cases
Enriched Data
40
Agenda BC – Instant payments
# Instant payments - PIX> Public consultation completed> Financial institutions applied to membership and started homologation cycle starts with mandatory testing> To be launched in November 2020
Highlights for 2020
Safety
> Operating rules approved> Implementation schedule
41
Agenda BC – Open bankingHighlights for 2020
How it works today
Open Banking
42
Agenda BC – BCB Autonomy
> Countries with more autonomous CBs have lower inflation level and volatility
Highlights for 2020
Source: Alesina A. e L. Summers (JMCB, 1993), Central Bank Independence and Macroeconomic Performance: Some Comparative Evidence
43
Agenda BC – Main Achievements 2020
• Measures to fight the economic effects of the Covid-19 crisis
• Regulation on issuance of electronic trade receivables
• Open-banking regulation
• PIX – BCB’s Instant Payment arrangement
▪ Brand launch
▪ Homologation phase; public release expected for November/2020
• Credit cooperatives allowed to issue Real Estate Credit Bills (LCI)
• Agreement between BCB and the National Treasury Secretariat (STN) to use instant
payments
THANK YOU
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June 26, 2020
ROBERTO CAMPOS NETO
Presidente do Banco Central do Brasil