Brazil Announces New Limits for Large Cash Withdrawals

By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – As part of its fight against corruption, Brazil’s Central Bank (CB) announced on Wednesday (June 28th) it was reformulating its regulation for large cash bank withdrawals. The decision comes a day after the CB released the country’s balance of payments for May 2017, which came in significantly lower than a year ago.

The country’s monetary authority increased the advanced notice period given by customers to banks for withdrawing large amounts from bank accounts from one to three days. The Central Bank also established that any cash withdrawal over R$50,000 must be registered with the Financial Activities Control Council (COAF). Currently only volumes above R$100,000 need to be registered.

The balance of payments in Brazil closed positive in May, with a surplus of US$600 million. The result, although positive is significantly lower than that of May 2016, when the surplus was of over US$ 3.7 billion.

The services account registered a deficit of US$2.5 billion last month while international travel expenses totaled US$1.1 billion, an increase of 58.7 percent compared to the volume observed in May 2016.

Direct investments totaled net inflows of US$2.9 billion for the month. According to the head of the BC’s Economic Department, Fernando Rocha, the result was the lowest for the month since 2009, and this happened because there were no major investments in May.

Rocha noted however that the smaller volumes in May should not lead to changes in projection for investments in the year. “We do not imagine that this is a trend for the second semester. It does not imply a revision of the projection of the Central Bank,” he concluded.