Brazilian banks' liquidity risk to remain low -central bank

BRASILIA, March 20 Thu Mar 20, 2014 11:03am EDT

BRASILIA, March 20 (Reuters) - Liquidity risks to Brazilian banks should remain stable in the first half of 2014 despite a slight increase in the previous six months, central bank director Anthero Meirelles said on Thursday.

Liquidity risks to the system increased slightly in the second half of last year but remain very low, the central bank said in a semiannual financial report released earlier on Thursday.

Meirelles, who is the central bank's director of financial supervision, said the rise in risk was due to a drop in the value of domestic debt held by banks along with a drop in global liquidity. Prices of Brazil's domestic debt have fallen due to an increase in the central bank's benchmark Selic interest rate. (Reporting by Alonso Soto; Editing by James Dalgleish)

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