Brazil’s central bank to add excess reserves to toolkit

The Brazilian central bank will add excess reserves to its toolkit to control liquidity and increase the efficiency of monetary policy, central bank chief Ilan Goldfajn said on Tuesday.

In a briefing, Goldfajn announced measures to reduce credit costs for companies and consumers in the medium- to long-term as part of the government’s push to revive an economy mired in recession.

He said the creation of the excess reserves, a mechanism in which the bank pays interest on excess reserves kept at the bank, is not aimed at reducing the fiscal deficit or the country’s debt burden.

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