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Following recent moves by China, Brasil's central bank raised reserve and capital requirements to slow consumer lending that’s growing 20 percent annually and to prevent a credit bubble.
The bank's outgoing chief Henrique Meirelles( pictured) estimates that $36 billion usd will be removed from circulation as time deposits rise to 20 percent from 15 percent and an additional requirement for non- interest bearing accounts will climb to 12 percent from 8 percent.
For foreign bond investors, the move is a "burburinho," a big deal, as rates plummeted.
Consumer prices grew by 5.47 percent through mid-November, the highest since March 2009. The bank's inflation target is 4.5 percent, plus or minus two percentage points.
