June 27, 2019 / 8:56 PM / 3 months ago

Brazil central bank says reducing reserve requirements is an active policy tool

BRASILIA, June 27 (Reuters) - Brazil's central bank said on Thursday that reducing banks' reserve requirements is an active policy tool aimed at improving market efficiency, but there is no estimate of how much it will yield or how long it will run for.

On Wednesday the central bank lowered requirements to 31% on time deposits from 33%, freeing up 16.1 billion reais ($4.2 billion).

Earlier on Thursday Economy Minister Paulo Guedes said that up to 100 billion reais could ultimately be released into the economy over time, and central bank chief Roberto Campos Neto said that reducing banks' requirements was a goal for the bank but should not be seen as a substitute for monetary policy. (Reporting by Jamie McGeever Editing by Leslie Adler)

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