The president of Brazil's Central Bank Henrique Meirelles said Monday that credit in the country has returned to the level it was at in last September, before the escalation of the international financial crisis.
Credit in Brazil fell 7.3 percent in October compared to September, but by January it had already returned to normal levels, with a 1.1 percent increase, Meirelles said.
Additionally, the stock of credit was up 6.5 percent in December compared to September, Meirelles said, with small banks registering a 0.6 percent increase in credit, and large banks registering a 10-percent increase. Public banks registered a 12.9 percent increase in the stock of credit in the period.
The credit crunch in international markets was one of the ways through which the international financial crisis reached Brazil, Meirelles said.
Because of that, he said, the government has been trying to fulfill demand for credit by injecting resources in the public banks to increase their capacity to grant credit.
"We are replacing the external credit. That is the first step. In the next step, it is important that the cost of credit falls," Meirelles said.
Meirelles believed that Brazil was much more prepared to face the crisis than many other countries. He said that was because Brazil has been seeing accelerated growth, expansion in salary indicators and a reduction in poverty levels.
The Central Bank has used a total of 61 billion U.S. dollars to fight the effects of the international financial crisis, Meirelles said.
From that amount, 14.3 billion dollars were used on dollar auctions in the spot market, 7.4 billion dollars were used on auctions with a buy-back clause, and six billion dollars went to auctions destined to exporters. Exchange swap contracts totaled 33.3 billion dollars.