Spread bets

摘要

With the economy sliding towards recession, at least Brazil's Central Bank finds itself able to cut interest rates hard and fast. On March nth it slashed its benchmark Selic rate by one-and-a-half percentage points, to 11.5%. Further cuts are expected. A welcome novelty: in the past, a fragile currency and roaring inflation prevented such counter-cyclical measures. But the rate cuts are not being passed on fully to borrowers, fanning an argument about the fat spreads charged by Brazil's banks (ie, the difference between the rates at which they borrow and at which they lend).