Gabriel Galípolo said credit-card borrowing, including loans charging about 15% a month, is a particular risk for households.
Brazil central bank chief Gabriel Galípolo warned against efforts to stimulate credit and consumption as household debt rises.
Galípolo said greater access to financing naturally increases indebtedness, but borrowing for short-term consumption is more concerning than loans used to acquire assets such as homes.
He identified credit cards as a particular risk after inclusion programs brought tens of millions of Brazilians into the financial system. Many now carry revolving or installment balances at high interest rates, with some loans charging about 15% a month.
The warning came as Brazil’s government expands cheaper financing to support consumption. The central bank recently cut its benchmark Selic rate by a quarter-point to 14% while citing upside inflation risks from demand stimulus.
