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Brazil central bank allows banks to deduct payments in advance to FGC fund from reserve requirements

BY Reuters | ECONOMIC | 04:41 PM EST

SAO PAULO, March 3 (Reuters) - Brazil's central bank has allowed financial institutions to deduct expected contributions in advance to the country's private credit guarantee fund FGC from their reserve requirements, it said on Tuesday.

The central bank said in a statement that the measure could result in the release of 30 billion reais ($5.69 billion) in reserve requirements this year.

FGC approved last month new rules to strengthen its liquidity, including bringing forward 84 months of lenders' contribution throughout 2028. The move happened after the central bank's liquidation of mid-size lender Banco Master. ($1 = 5.2717 reais) (Reporting by Fernando Cardoso)

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