Brazil bank loans rise 1.1% in September, annual growth eases

BRASILIA, Oct 29 (Reuters) - Bank lending in Brazil grew at a faster pace in September than in the previous month, but its 12-month expansion continued to slow amid tight borrowing conditions, central bank data showed on Wednesday.

Outstanding loans rose 1.1% in September from August to 6.8 trillion reais ($1.26 trillion), while the year-on-year increase eased to 10.1% from 10.4% in August.

The monthly expansion seen in August was 0.8%, according to revised central bank data.

The central bank has said credit growth is decelerating as expected following an intense monetary tightening cycle aimed at curbing inflation.

Policymakers have raised interest rates by 450 basis points since September last year, bringing them to 15%, the highest level in nearly two decades.

Since July, they have kept the benchmark rate unchanged, signaling plans to maintain that stance for an extended period. The next policy decision is scheduled for November 5.

According to the central bank, a broad measure of consumer and business default ratios for non-earmarked credit slipped to 5.3% in September from 5.4% the month before, while average lending spreads narrowed to 31.9 percentage points from 32.2.

($1 = 5.4039 reais)