Brazil's National Monetary Council decided Thursday to change the regulations for compulsory bank deposits in order to inject 40 billion reais (about 17 billion U.S. dollars) into the Brazilian economy.
Compulsory deposits, which are the share of bank deposits that must be passed on to the Central Bank, will no longer be collected in cash, but in government bonds.
The measure, to take effect on Dec. 1, aims to increase the liquidity of Brazilian banks. It is the latest in a series of steps taken by the Brazilian Central Bank in order to boost the domestic market.
Since the international financial crisis began to escalate in late September, the Brazilian government has made several changes in the compulsory deposits regulations, including reductions in percentages.
Additionally, the Brazilian Central Bank has held U.S. dollar auctions and conducted currency swaps in order to help the country's exporters which have been suffering from absence of credit, and also to halt the devaluation of the Brazilian real, which has lost 45 percent of its value since early September.
(Xinhua News Agency November 14, 2008)
