Brazil's outstanding credit stable in January, but up on yearly basis

BRASILIA, March 13 (Reuters) - Brazil's outstanding credit stock was stable in January from the previous month, central bank data showed on Thursday, but continued to expand on an annual basis despite high borrowing costs.

Total loans in Latin America's largest economy reached 6.462 trillion reais ($1.11 trillion), marking an 11.7% increase over 12 months, up from 11.5% in December.

A broad measure of consumer and business default rates in non-earmarked credit rose to 4.4% from 4.1% the previous month, while lending spreads in this category widened by 1.1 percentage points to 28.2 percentage points.

Despite an aggressive monetary tightening cycle since September, pushing Brazil's benchmark interest rate to 13.25% with a further 100 basis-point hike signaled for next week, credit demand has remained strong, supporting consumption and adding pressure on inflation.

In late February, policymakers warned in the Financial Stability Committee minutes that credit expansion, despite high borrowing costs and rising household and corporate debt, required caution and close monitoring.

($1 = 5.7989 reais)