(MENAFN) Brazil's central bank has cut reserve requirements for banks, releasing some USD15 billion in liquidity for lending, Reuters reported.
The central bank also decided to cancel additional reserve requirements of six percent on demand deposits. An additional requirement on term deposits would be lowered 1 percentage point to 11 percent, effective Oct. 29.
The move, which comes amid cautiousness among banks in terms of lending, aims to boost lending by private-sector banks and may help put an end to a year-long rate-cutting cycle by the central bank.
The government of President Dilma Rousseff has demanded that private-sector banks increase lending and slash interest rates to help push the newly recovering Brazilian economy, after a year of almost stand-still growth.
The central bank cut its benchmark Selic rate for the ninth straight time to an all-time low of 7.5 percent on Aug. 29, leaving the door open for a final rate cut in October.
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