BRAZILIAN-AMERICAN CHAMBER OF COMMERCE OF FLORIDA (BACCF)

ECONOMIC CHALLENGES IN TIMES OF CRISIS

1

June 26, 2020

ROBERTO CAMPOS NETO

Presidente do Banco Central do Brasil

0

-20

-40

-60

-80

-100

Crise Global (08/09/08)

Taper Tantrum (17/05/13)

China Scare (26/07/15)

Covid-19 (21/01/20)

0 D+15 D+30 D+45 D+60 D+75 D+90

Source: IIF

Capital Outflows – Non ResidentsGlobal Shock

Emerging Economies

2

US$

bil

lio

n

Accumulated balances since the informed date

Source: Central banks of Chile, Colombia, Peru and Mexico, Bloomberg, IIF

Capital Outflows – Non ResidentsGlobal Shock

Emerging Economies

3

Recent accommodation, but accumulated outflow in the year is still substantial

*Resized by the share of each country prior to the exit episode

Brazil

Hungary

India

Czech rep.Turkey

Indonesia

Colombia

Poland

Singapore

Peru

Korea

Mexico

Ukraine

Chile

-10

-8

-6

-4

-2

0

2

4

6

8

-10 -8 -6 -4 -2 0 2 4 6 8

Portfolio outflows – non residents*

Po

rtfo

lio o

utf

low

in 2

008

:Q3

and

Q4

, in

% o

f th

e b

ala

nce

in 2

008

:Q2

Portfolio outflow in 2020:Q1, in % of the balance in 2019:Q4 -2.70

0.83

-0.35 -0.59

Brazil Chile Colombia Mexico

23-Mar

-33,8

22-Jun

-16,9

-40

-30

-20

-10

0

17-Jan 12-Feb 9-Mar 4-Apr 30-Apr 26-May 21-Jun

Bloomberg Capital Flow Index - EMEs (%)

Flows to investment funds* tend to usual levels

Source: Commerzbank, EPFR

Normalization of investments

4

Global Shock

Recovery Signs

*- Four weeks moving average in yellow.

shar

e u

nd

er

man

age

me

nt

(pp

. ch

ange

)

Source: Deutsche, Gavekal

Mobility

5

Gradual reduction in social distancing at uneven paces across countries

NorwayDenmarkSwitzerlandSwedenNew ZealandUSAustraliaEurozoneCanadaUK

GermanyGreeceFinlandFranceAustriaNetherlandsItalyBelgiumPortugalSpainIrelandIsraelCzech RepPolandHungarySouth AfricaTurkey

South KoreaVietnamHong KongTaiwanJapanThailandIndonesiaIndiaMalaysiaSingaporePhilippinesBrazilMexicoColombiaArgentinaChile

G1

0Eu

rozo

ne

CEE

MEA

Asi

aLa

tam

|15-Feb |15-Mar |15-Apr |15-May

0: reference level

Goo

gle

Res

iden

tial

Mob

ility

GD

P 20

Q1

(t/t

-1)

Global Shock

Recovery Signs

Feb/29 07 14 21 Mar/28 04 11 18 Apr-25 02 09 16 23 May/30 Jun/06

Google Residential Mobility (difference from reference)

US Germany Italy Brazil India

Source: Bloomberg

USA: Economic Activity

6

Strong decline led by sharp fall in consumption

Global Shock

Global Economy

Real GDP

06q3 08q4 11q1 13q2 15q3 17q4 20q1

pp

. an

d %

(Q

oQ

an

nu

aliz

ed)

Consumption

Net Exports

Investment

Government

Change in stocks

GDP (QoQ)

Source: NBS and Bloomberg

China: Economic Activity

7

Global Shock

Global Economy

16

-Ma

y

Sep

17

-Ja

n

Ma

y

Sep

18

-Ja

n

Ma

y

Sep

19

-Ja

n

Ma

y

Sep

20

-Ja

n

Ma

y17-M

ay

Au

g

No

v

18-

Feb

May

Au

g

No

v

19-

Feb

May

Au

g

No

v

20-

Feb

May

16

-Ma

y

Sep

17

-Ja

n

Ma

y

Sep

18

-Ja

n

Ma

y

Sep

19

-Ja

n

Ma

y

Sep

20

-Ja

n

Ma

y

Faster economic recovery on supply side

Ret

ail s

ales

(%

y/y

)

Ma

nu

fact

uri

ng

(% y

/y)

dif

fusi

on

ind

ex ex car sales: - 3.5% in May

Source: Bloomberg and central banks.

EMEs: Economic Activity

8

Strong revisions of growth expectation

Global Shock

Emerging Economies

Chile Colombia Mexico Peru S. Africa

Chile Colombia Mexico S. Africa

Chile Colombia Mexico Peru S. Africa

BBGWBOECD

20 21

GDP growth Revision of expectations

GD

P G

row

th(%

Q/Q

–s.

a.)

GD

P f

ore

cast

s(%

y/y

)

2

-2

-6

-10

2

4

0

-2

-4

-6

8

4

0

-4

-8

-12

Source: Bloomberg and central banks.

EMEs: Economic Activity

9

Indicators show additional deterioration on 20q2.

2020JanFebMarApr

Brazil Chile Colombia Mexico S. Africa

Ret

ail s

ales

(%

y/y

)

2020JanFebMarApr

Brazil Chile Colombia Mexico S. Africa

Ma

nu

fact

uri

ng

(% y

/y)

2020JanFebMarAprMay

Brazil Colombia Mexico S. Africa

PMI Manufacturing

Global Shock

Emerging Economies

Emerging Markets: monetary conditionsGlobal Shock

Emerging Economies

10

jun 19 aug 19 oct 19 dec 19 feb 20 apr 20 jun 20

8

6

4

2

0

%

Brazil Chile Colombia Mexico Peru S. Africa

Policy rate

0

2

4

6

8

10

12

S. Africa(govnt. bonds)

Chile(BCCh bonds)

Chile(banks' bonds)

Colombia(govnt. bonds)

Colombia(banks' bonds)

Turkey(govnt. bonds)

Announced or authorized Executed

8.58.0

1.1

2.7

11.3

0.0

2.33.3

6.0

1.1

2.3

7.7

Asset purchases

3.75

5.50

2.752.25

0.500.25

US$

bil

lio

n

Monetary policy easing, and programs of asset purchases.

Source: BIS, Bloomberg, SARB, PBoC, Banxico, BCR, Banrep, BCCh, BRP. CBRT.

Brazil: Impact of Covid-19

11

Preliminary retail data indicate some recovery, except for services. Focus survey point to a strong decline in activity for 2020.

Retail sales – Cielo* Focus expectations – Growth for 2020

AverageMedianPercentiles 25% and 75%

Source: BCB, Focus (06/19/2020)Source: Cielo

Shock on activity

Domestic Economy

%

%

*Change in revenues in relation to the same days of Feb/20, with calendar adjustments.

-80

-70

-60

-50

-40

-30

-20

-10

0

1001 - 28 29 - 02 03 - 30 31-06 07-13 14 - 20

Mar Apr May Jun

Total Retail Non-Durables Durables Services

1.0

0.0

-1.0

-2.0

-3.0

-4.0

-5.0

-6.0

-7.0

-8.0

12

Source: CCEE

Shock on activity

Domestic EconomyBrazil: Impact of Covid-19

Electricity consumption by manufacturing industry (free market)Percentage change regarding 09-13 March

- Electricity comsumption – Moving average of 5 working days.- Highlighted values refer to the change observed in the last day (June 10th).

Uneven paths of fall and recovery among sectors of manufacturing industry

May May01 Mar 01 April 01 May 01 Jun 01 Mar 01 April 01 May 01 Jun

200

0

-200

-400

-600

-800

-1000Apr Apr Apr Apr Apr

2016 2017 20202018 2019

Monthly Quarterly moving average

112,5

-203,3

-932,0

-344

All data are seasonally adjusted. Sources: Ministry of the Economy and BCB

13

70

80

90

100

110

120

130

140

150

160

Apr-16 Apr-17 Apr-18 Apr-19 Apr-20

Consumers ManufacturingServices BuildingRetail

Confidence indicators

Apr/16= 100Jun/2020= preliminary, except for Consumer and Building Confidence

Widespread effect on the economy

Brazil: Impact of Covid-19

*2002 = 100

IBC-BR*Employment - Caged

Net job creation (thousands)

115

120

125

130

135

140

Apr-16 Apr-17 Apr-18 Apr-19 Apr-20

Monthly Quarterly moving average

April/2020Montly change: -9.73%Apr20/ Apr19: -15.09%

Shock on activity

Domestic Economy

14

GDP 2020:Q1 shows a sharp drop in activity

GDP – Seasonally adjusted

Source: IBGE

160

162

164

166

168

170

172

174

2015

:1T

2015

:3T

2016

:1T

2016

:3T

2017

:1T

2017

:3T

2018

:1T

2018

:3T

2019

:1T

2019

:3T

2020

:1T

-1.5%2020:Q1 compared to 2019:Q4

GDP 2020:Q1(supply)

GDP 2020:Q1(demand)

GDP Agriculture Manufacturing Services

-1.5

0.6

-1.4-1.6

-1.5 -2.0

0.2

3.1

-0.9

2.8

2015

:Q1

2015

:Q3

2016

:Q1

2016

:Q3

2017

:Q1

2017

:Q3

2018

:Q1

2018

:Q3

2019

:Q1

2019

:Q3

2020

:Q1

Shock on activity

Domestic EconomyBrazil: Impact of Covid-19

%Q/Q-1

%Q/Q-1

Source: FED, ECB, Bloomberg

Pandemics: risk perception

15

Global Shock

Global Markets

*Number of countries with daily growth of new cases higher than 5%; sample of 105 countries.

New Covid-19 cases* vs. VIXRisk Appetite

(right)

-4

-3

-2

-1

0

1

Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20

stan

dar

d d

evi

atio

nfr

om

the

me

an

Advanced Economies Emerging Markets

12

30

48

66

84

0

25

50

75

100

Feb-20 Mar-20 Apr-20 May-20 Jun-20

# Countries

VIX

16

Capital flows and local currency were severely affected in Brazil

External Problems + Domestic SituationGlobal Shock

Domestic Markets

FX Change YTD against USD%

Capital Flows

US$ bn

Source: Bloomberg, 06/24/2020Source: Nacional Accounts/BCB, 06/18/2020

-25

-20

-15

-10

-5

0

5

10

2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 0

jan feb mar apr may jun

Equities Bonds 2019 2020

Source: Bloomberg, BCB

Local Assets Performance

17

GFC vs. Covid-19

T0 → GFC: 15/09/2008; Covid: 12/02/2020

Covid-19GFC

BCB Interventions (US$ mi)

Global Shock

Domestic Markets

T0: Index = 100

80

90

100

110

120

130

140

T-40

T-20 T0

T+2

0

T+4

0

T+6

0

T+8

0

T+1

00

T+1

20

T+1

40

T+1

60

T+1

80

T+2

00

T+2

20

T+2

40

USDBRL

GFC COVID-19

50

60

70

80

90

100

110

120

130

T-40

T-20 T0

T+2

0

T+4

0

T+6

0

T+8

0

T+1

00

T+1

20

T+1

40

T+1

60

T+1

80

T+2

00

T+2

20

T+2

40

Ibovespa

GFC COVID-19

T0: Points = 0

-100

0

100

200

300

400

T-40

T-20 T0

T+2

0

T+4

0

T+6

0

T+8

0

T+1

00

T+1

20

T+1

40

T+1

60

T+1

80

T+2

00

T+2

20

T+2

40

CDS

GFC COVID-19

T0: Index = 100

Source: B3

Ibovespa Flows

18

Investors’ reaction

Global Shock

Domestic Markets

-150

-100

-50

0

50

100

150

0

20

40

60

80

100

120

140

Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20

Milh

õe

s

Ibovespa Foreigners Individuals Institutionals

BRL bn000´s points

Source: BCB

External accountsGlobal Shock

Domestic Economy

19

Capital outflows will accommodate and external accounts will improve

Current account

Accumulated in 12 monthsJune 2020 = forecast

Direct investment in the country

Accumulated in 12 monthsJune 2020 = forecast

Current account

Decomposition

US$ Billion

US$ billion (left)

Jan-May 20

Direct investment abroad

% GDP (right)

US$ billion (left)

% GDP (right)

Jan-May 19

-3,0

-2,5

-2,0

-1,5

-1,0

-0,5

0,0

-55-50-45-40-35-30-25-20-15-10

0,0

1,0

2,0

3,0

4,0

5,0

60

65

70

75

80

85

-7

-5

-3

-1

1

3

5

Balance of goods

Travel

Operating leasing services

Transport

Dividends

Interest

Other

19,719,0

15,114,3 14,1 14,0 13,7

13,1

11,411,0 10,7 10,4

9,8 9,6

7,3 7,2 7,06,3 5,9

5,0 5,04,4 4,2 4,1 4,0 4,0

3,1 2,9

0

10

20

Fiscal Response

20

% GDP

Comparative vision

Source: IMF, UN and BCB. Updated to 11/06. Data include credit guarantees.

Global Shock

Facing the crisis

Source: FED, ECB, BoE and BCB

Fiscal Response

21

Current responses shall surpass that of the GFC – WEO projections for 2020

Global Shock

Facing the crisis

Note: Values within bracketsrepresent expected increasein gross public debt in 2020compared to 2019.(in pp. of GDP)

Japan (+14.5)

Italy (+20.8)

US (+22.1)France (+16.9)

Spain (+18.0)UK (+10.3)

Canada (+20.9)

Germany (+8.9)

Australia (+14.3)

South Korea (+5.0)

Denmark (+8.0)

Netherlands(+10.0)

Gross public debt (% GDP)

Ne

t p

ub

lic d

eb

t (%

of

GD

P)

Source: Fed, BOJ, Bloomberg, Thomson Reuters

Central banks’ response

22

Programs result in large injection of liquidity into financial systems

Global Shock

Facing the crisis

Fed ECB

Announced Implemented*

* Feb 24th / Jun 15th 2020

LSAP = Large-Scale Asset PurchaseMLF = Municipal Liquidity FacilityMBSPP = Mortgage-Backed Securities Purchase ProgramPMCCF = Primary Market Corporate Credit FacilitySMCCF = Secondary Market Corporate Credit FacilityCPFF = Commercial Paper Funding Facility

DWL = Discount window lendingPDCF = Primary Dealer Credit Facility MMLF = Money Market Mutual Fund Liquidity FacilityTALF = Term Asset-Backed Securities Loan FacilityMSLP = Main Street Lending Program PPPLF = Paycheck Protection Liquidity Facility

PEPP= Pandemic Emergency Repurchase ProgramAPP = Asset Purchase ProgramsLTRO = Long Term Refinancing Operations PELTRO = Pandemic Emergency Refinancing OperationsTLTRO III = Targeted Long Term Refinancing OperationsLiq. USD = Liquidity in US$

Source: FED, ECB, BOJ and Bloomberg

Central banks’ response

23

Sharp balance sheets expansion

Central banks balance sheets

Bank of Japan

European Central Bank

Federal ReserveUSA

Global Shock

Facing the crisis

Change (pp. GDP)2020 2008-13

until march

Credit

Others

Room for conventional policies

24

Brazil: cautious MP actions

Source: Bloomberg

15

10

5

0

Real Public Spendingyoy % change

12.4%

pre-cap interest rate

5.3%

post-cap interest rate

04 06 08 10 12 14 16 18 20*

Source: BCB, 2020 forecast

Structural Interest Rate Reductions1 year rate

Macroeconomic Outlook

Monetary Policy

0

4

8

12

16

Government Expenditure Cap

Social Security

0

2

4

6

8

10

12

Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20

Yie

ld (p

.p)

Brazil Mexico Russia Chile

South Africa Peru Colombia India

Room for conventional MP

25

Part of EMEs faces policy constraints

Net public debt2019

Five years yield

High debt: relevant risk factor

Source: Bloomberg

Macroeconomic Outlook

Monetary Policy

Fonte: IMF, Standard & Poor’s

70

60

50

40

30

20

10

0

26

Monetary Policy

• In its last meeting, the Copom unanimously decided to lower the Selic rate by 0.75percentage point to 2.25% p.a.

• The Copom believes that the current state of affairs continues to recommend an unusuallystrong monetary stimulus, but it recognizes that the remaining space for monetary policystimulus is uncertain and should be small.

• For the next meetings, the Committee sees as appropriate to evaluate the impact of thepandemic and of the set of credit and transfer programs in place and foresees that anypossible adjustment to the monetary stimulus would be residual.

• The Committee recognizes that the variance of its balance of risks has increased and thatfurther information on the evolution of the pandemic, as well as a decline in fiscaluncertainty, will be essential to determine its next steps.

Macroeconomic Outlook

Domestic Economy

The roles of monetary and fiscal policiesMacroeconomic Outlook

Domestic Economy

27

Monetary and fiscal policies have well-defined roles

SolvencyFiscal Policy

If not properly managed, liquidity problems can become solvency problems.

LiquidityMonetary Policy

SummaryMeasures’ impacts

28

Source: BCB¹Potencial impact on credit provision.* Credit operations volume potentially benefited by the measure.** New measures.

0

100

200

300

400

500

600

700

800

ReserveRequirements

GuaranteedFinancial Letter

New DPGE Loans backed bydebentures

Debtrenegotiations

Credit line tofinance SME's

payroll

FX overhedge ofequity abroud

Reduction ofCapital

ConservationBuffer

Capital relief forSME credit

Central Bank of Brazil Response

29

Source: BCB

Potential Implemented

Liquidity support and capital relief

BRL billion

Global shock

Facing the crisis

Capital relief

BRL 3.2 trillion

Emerging Markets EconomiesCovid-19 Measures -Comparative overview

30

Covid-19 Outbreak

Facing the crisis

Liquidity Support(% of GDP)

Credit Support(% of GDP)

Source: FSB/BCB – until June 23th

20.0% Brazil17.5% Brazil

Source: Cetip

Non-banking fundingPrivate bonds

Domestic EconomyDebentures outstanding fell more than other non-bank assets issued

198.8 (423)

35.4 (42)

24.4 (76)

37.2 (45)

3.6 (48)

-20

0

20

40

60

80

100

120

140

160

180

200

220

Jan2016

Apr Jul Oct Jan2017

Apr Jul Oct Jan2018

Apr Jul Oct Jan2019

Apr Jul Oct Jan2020

May

BRL billion Non-bank fund rasing outstanding– accumulated growth

Debentures Real Estate Receivables Certificates (CRI) Agribusiness Receivables Certificates (CRA) Commercial notes Others

March-May 2019 March-May 2020

Debentures 28.6 -10.4

CRI -0.7 -0.3

CRA 3.7 -1.1

Commercial Notes -1.2 15.2

Others 0.6 3.1

Total 30.9 6.5

Accumulated outstanding growth (BRL billions)Asset

31

32

Debentures Trading on the Secondary MarketTrading volumes and spreads of the top 100 negotiated debentures are close to pre-Covid19 crisis level. Higher risk debentures still trade at higher spreads.

Source: B3, Cetip

228

190

351

1331,0

2,5

1,9

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

0

250

500

750

Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20

R$ million Debentures AA - ATop 100 Daily volume, average volume and spread

Daily Volume Average Volume (20 days) Spread (right)

p.p.

93

196

69

1,3

3,7

3,2

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

0

250

500

750

nov/19 dez/19 jan/20 fev/20 mar/20 abr/20 mai/20 jun/20

R$ million Debentures B – C – DDaily volume, average volume and spread

Daily Volume Average Volume (20 days) Spread (right.)

p.p.

* Data until June 23rd 2020.

Private bonds

Domestic Economy

Nonearmarked new credit transactions

33

Increase in credit to firms amid the crisis

* Not including overdraft and credit card. Weekly data, accumulated over the last five working days, up to June 5th

Source: BCB

0

10

20

30

40

50

60

1 3 5 7 9 11 13 15 17 19 21 23

BR

L b

illio

n

Weeks

Effects of measures

Credit Distribution

Households*Business*

2020 2019

0

5

10

15

20

1 3 5 7 9 11 13 15 17 19 21 23

BR

L bi

llio

n

Weeks

Average interest rates: new credit transactions

34

Nonearmarked credit (% p.y.)

discount of trade billsworking capital up to 365 daysworking capital over 365 daysguaranteed overdraft accounts (right)

payroll-deducted personal loans -totalvehicles financingpersonal credit (right)

% % Households% %

Source: BCB

Effects of measures

Credit Cost

Business

25

27

29

31

33

35

37

39

41

43

8

10

12

14

16

18

20

22

24

Jan/18 May/18 Sep/18 Jan/19 May/19 Sep/19 Jan/20 May/20 70

80

90

100

110

120

130

19

20

21

22

23

24

25

26

27

Jan/18 May/18 Sep/18 Jan/19 May/19 Sep/19 Jan/20 May/20

New transactions and credit renewals

35

From March 16th to June 12th

Source: BCB

S1 = large banks, separated by public and private sector

S2 = medium banksS3 and S4 = small

banks

◼ S1 – public ◼ S1 – private

New transactions

(1) Includes debentures totaling BRL 30.3 billions. (2) Includes: full renewal of the credit operation, including new credit; as well as renegotiations with changes in interest rate and guarantees.

Credit renewals Total

Effects of measures

Credit Distribution

Corporate Middle SME Household Total Corporate Middle SME Household Total

S1 - public 31.6 11.2 14.8 61.0 118.7 7.7 16.2 20.7 50.2 94.8

S1 - pivate 169.8 28.8 27.9 55.6 282.1 77.6 15.3 8.2 26.8 128.0

S2 31.7 5.1 1.1 12.2 50.0 3.7 0.4 0.1 0.2 4.3

S3 32.2 10.2 2.4 16.7 61.6 10.7 2.0 1.0 5.3 19.1

S4 8.8 6.0 1.4 4.5 20.8 1.7 3.2 0.2 2.7 7.8

Total 274.2 61.3 47.7 150.1 533.2 101.4 37.1 30.1 85.3 253.9

BRL billions

SegmentsNew transactions (1) Credit renewals (2)

Debt renegotiation: operations that had installments extended after the new CMN and BCB’s regulation

36

From March 16th to June 12th

Source: BCB

Extension of loan installments, with the same interest rate – values in BRL billions

Number of contracts Value of operations extended Value of installments extended

◼ S1 – public ◼ S1 – private

Effects of measures

Credit Distribution

Number of

contracts

Value of

operations

Install-

ments

value

Number of

contracts

Value of

operations

Install-

ments

value

Number of

contracts

Value of

operations

Install-

ments

value

Number of

contracts

Value of

operations

Install-

ments

value

Number of

contracts

Value of

operations

Install-

ments

value

S1 - public 858 9.3 1.4 10,517 15.5 3.4 476,552 31.4 6.9 3,392,363 248.5 17.4 3,880,290 304.8 29.0

S1 - pivate 4,514 24.6 9.9 99,987 23.7 7.7 600,942 35.3 4.6 4,957,111 103.3 8.3 5,662,554 186.9 30.5

S2 1,096 16.0 1.3 10,222 87.5 7.1 43,755 1.1 0.1 1,058,361 22.0 1.3 1,113,434 126.5 9.9

S3 982 2.2 0.7 39,546 7.5 1.2 11,209 1.2 0.1 144,432 8.7 3.7 196,169 19.6 5.7

S4 330 0.6 0.3 57,139 6.1 2.9 6,589 1.5 0.3 79,948 2.9 0.2 144,006 11.0 3.7

Total 7,780 52.6 13.5 217,411 140.3 22.3 1,139,047 70.5 12.0 9,632,215 385.3 30.9 10,996,453 648.8 78.8

Seg-

ments

Corporate Middle SME Household Total

PESE – Emergency Employment Support Program

37

Effects of measures

Credit DistributionThe program* strongly benefits low wage employees in the whole country

* Data updated up to 06/19/2020** Preliminary values reflecting potential demand based upon pre-crisis data (subject to future revision)

Geografic Distribution Wage Distribution Program enhancement – MP 944/20

1) To include firms with higher revenues in 2019: R$ from 10 to R$ 50 millions.

2) Extension of the program by 2 month.

3) Credit to firms keeping at least 50% of their employees.

Expected additional impact:**

1) R$ 5 billion: additional months to currently eligible firms;

2) R$ 5 billion: extension to new firms.

Total program:**

R$ 15.5 billion

em

plo

yee

s (i

n th

ou

san

ds)

0 – 1 1 – 1,5 1,5 – 2 2 – 5 5+minimum wages

employees funded firms amount financed

38

INCLUSION COMPETITIVINESS

TRANSPARENCY EDUCATION

COMPETITIVENESS TRANSPARENCY EDUCATIONINCLUSION

TRANSPARENCY OF MONETARY POLICY

COOPERATIVE CREDIT

MICROCREDIT

CURRENCY CONVERSIBILITY

INITIATIVES FOR CAPITAL MARKET (IMK)

INNOVATION

MARKET EFFICIENCY

INTERNATIONAL RESERVES

RURAL CREDIT

HOUSING CREDIT

RELATIONSHIP WITH CONCRESS

FINANCIAL EDUCATION

COMMUNICATION PLAN FOR BCB ACTIONS

RELATIONSHIP WITH FOREIGN INVESTORS

39

Availability

Speed

Convenience

Open environment

Various use cases

Enriched Data

40

Agenda BC – Instant payments

# Instant payments - PIX> Public consultation completed> Financial institutions applied to membership and started homologation cycle starts with mandatory testing> To be launched in November 2020

Highlights for 2020

Safety

> Operating rules approved> Implementation schedule

41

Agenda BC – Open bankingHighlights for 2020

How it works today

Open Banking

42

Agenda BC – BCB Autonomy

> Countries with more autonomous CBs have lower inflation level and volatility

Highlights for 2020

Source: Alesina A. e L. Summers (JMCB, 1993), Central Bank Independence and Macroeconomic Performance: Some Comparative Evidence

43

Agenda BC – Main Achievements 2020

• Measures to fight the economic effects of the Covid-19 crisis

• Regulation on issuance of electronic trade receivables

• Open-banking regulation

• PIX – BCB’s Instant Payment arrangement

▪ Brand launch

▪ Homologation phase; public release expected for November/2020

• Credit cooperatives allowed to issue Real Estate Credit Bills (LCI)

• Agreement between BCB and the National Treasury Secretariat (STN) to use instant

payments

THANK YOU

44

June 26, 2020

ROBERTO CAMPOS NETO

Presidente do Banco Central do Brasil