Economy

Last Christmas, inspired by Randall Munroe’s delightful books What If? and What If? 2, I invited the good folk of Twitter to ask me absurd hypothetical questions about the economy, to which I would attempt some serious answers. This year, we’re going to do it all again.Alex asks: How big would an asteroid made of precious metal have to be for it to be worth doing a space mission to bring it back?To answer this question I consulted Soonish, a book by Kelly and Zach Weinersmith, which devotes a chapter to the problem. Some asteroids have much higher concentrations of metal than are typical near the surface of earth, and a decent-sized golden asteroid does sound tempting.Alas, there are three problems: physics, engineering and economics. Engineering first. If you want to mine an asteroid, you either need to set up a refinery in space (difficult) or send huge amounts of unrefined ore back through the atmosphere to be refined back on Earth (messy).Then there’s economics: if you somehow did find an inexpensive way to bring a million tonnes of gold back to Earth, gold itself would become frustratingly cheap. A space-mining monopoly might be able to hoard a stockpile and release it slowly, but even that is doubtful. Two competing space miners would be a recipe for a price collapse.And finally, physics itself: Earth’s gravitational pull is strong, which means it’s hugely energy-intensive to get up into orbit. The cost of getting anything into space is nearly £20,000/kg. This is going to make your asteroid-mining venture expensive, but more fundamentally it means that the most valuable things in space aren’t gold and platinum, but basics such as soil and water. These are the things you’ll need to support any kind of human settlement in space. Forget the golden asteroid: if there’s money in mining anything from asteroids, it will be compost and ice.Anita asks: Could a universal currency ever be based on electricity, or currents?The economics textbooks will tell you that a good currency has three characteristics. First, it is a store of value, something that will still be worth a decent amount tomorrow, next week or next month. There are lots of possibilities here: gold, bitcoin or dollars, for sure, but also rice, or shares in Apple, or a house. (Less good: tickets to see a concert tonight, fresh vegetables, the Argentine peso.)Second, money serves as a unit of account, meaning that it has a consistent, well-understood price relative to other goods. Salt was once a good example, since both the supply of and demand for salt were very stable. It seems likely that some contracts were denominated in salt — hence the word “salary”.Here bitcoin falls down, because its price fluctuates wildly; the same is true of shares in a tech titan. These may or may not be attractive investments, but if you have to keep double-checking their price, they are not attractive currencies.Finally, money needs to operate as a medium of exchange. Traditionally that would have meant lightweight, divisible, easy-to-recognise, hard-to-forge notes or coins — or, in extremis, portable standardised goods such as cigarettes or tins of mackerel. But these considerations are less important in a cashless society. You can pay dollars for goods using a credit card which you later settle in euros, and in principle retailers around the world will happily accept your credit card whether your bank wants you to pay the bill using Swiss francs or bitcoin.With that preamble out of the way, where do we stand on a current currency? The answer is that electricity is one of the worst currencies imaginable. Electricity is a very poor store of value, since the problem of how to store electricity is one of the defining ones of our age. It is telling that most solutions to the electricity storage problem begin by turning the electricity into something else, such as chemical potential energy.And few commodities fluctuate in price more wildly than electricity. Because it cannot easily be stored, the price will leap and crash minute by minute depending on factors such as whether the wind is blowing, whether the sun has disappeared behind a cloud and whether everyone has just put the kettle on. Consumers are shielded from all this volatility, but it is there nevertheless.There must be a worse candidate for a currency than electricity, but I cannot think of one.Olly asks: What if your tax bill was discounted by the distance you lived from the centre of London (eg if you lived in Kingsway, you paid the full amount; if you lived in Shetland, you would pay no tax)?I suppose the aim here might be to encourage people to move away from London and into less populated areas. If this policy was a success, the likely outcome would be a damaged environment (with more driving and less travel by efficient methods such as trains, bicycles and elevators) and a much less dynamic economy (since cities are where most innovation takes place). I am reminded of the great urbanist Jane Jacobs’s sarcastic description of “a nice, even smear of mixed economic activity”, which seems so plausible from behind a bureaucrat’s desk, and which would be such a disaster in practice.Fortunately, this tax would make less difference than you think. In response to these tax incentives, some people would be minded to move further away from Kingsway and closer to Shetland. The mere temptation for this mass exodus to occur would prompt both rents and property prices to adjust, offsetting the tax. Owners of London property would suffer, while owners of property far from the charms of Kingsway would prosper. Not many people would actually move. Thank goodness.Michael asks: What if inflation was made illegal? Could we legislate that no prices could ever rise?The economist Alex Tabarrok notes that “a price is a signal wrapped up in an incentive”. What he means is that an increase in the price of a product informs everyone that the product is in short supply, and also rewards consumers who buy less and producers who make more. A well-functioning price system — that is, one in which prices can rise (and fall) — is absolutely fundamental to encouraging an efficient use of resources in a complex economy.These relative price changes are useful, even if a generalised rise in prices is unwelcome. The challenge is to allow relative prices to change without allowing average prices to rise. That contradiction is why most efforts to control inflation start by trying to influence the price of money itself.But you have a different proposal, so let’s run with it. Imagine that your law freezing all prices is introduced and that it is widely respected. Two things follow: the economy cannot properly adjust to shortages and surpluses, and the economy cannot adjust to technological change.For example, would it even be legal to offer a new edition of the iPhone or the Tesla for sale? That would seem to introduce a new price, which is against the law. Or perhaps you think it should be legal to introduce new products at new prices — in which case, expect products to be endlessly withdrawn, reformulated in some trivial way and then reintroduced at a different price.It would also be hard to cope with fluctuations in supply or demand. Say there is an increase in the demand for physiotherapists, or coffee. Normally, we’d expect the price of coffee to rise (inducing people to drink tea instead and encouraging coffee farmers to cultivate more coffee beans) and the salaries of physiotherapists to rise (encouraging them to work overtime or delay retirement and attracting new people into the profession). But because you’ve outlawed price rises, none of this can happen: instead expect long queues for treatment and empty shelves in the supermarket.In truth, it seems more likely that the law would be widely flouted. There would be many surpluses, many shortages and a lot of needless fuss doing deals under the counter or around the back to sell goods at a price that reflected economic reality rather than the mandated and unchanging official price.What would happen if inflation was made illegal? Nothing good.Nicola asks: In the UK, we used to print banknotes on paper, now it’s a horrible slippery plastic. Could we use a more environmentally friendly material, like leaves? Or perhaps something edible — printed on some sort of simple flour and water biscuit? No waste!Fans of Douglas Adams may recall the tale of the civilisation that decided to adopt the leaf as legal tender. Briefly believing themselves to be rich, they soon found “three deciduous forests buying one ship’s peanut”.This won’t do. Whether your proposal runs into a similar problem rather depends on your approach. If you simply plan to allow any leaf to serve as currency, the resulting hyperinflation problem will at least put our recent travails into perspective.But perhaps you intend only officially issued currency, printed on leaves or nutritious wafers, to circulate as legal tender. This might work, but I have some concerns. There is, of course, the question of whether security features such as the transparent window, metallic foils and holograms can really be added to an edible substrate.There is also the question of durability. The Bank of England will replace damaged notes with new ones, and keeps track of these exchanges. Since the most common note, the £20, was replaced with plastic in early 2020, there has been a notable fall in requests to exchange currency.Maybe that simply reflects the switch to electronic payments during and after the pandemic. But I wonder: one common source of damage is listed as “chewed/eaten” — such lamentable incidents became very rare almost overnight when plastic notes were introduced. Your edible currency may seem sustainable; it will not be so sustainable if people snack on the contents of their wallets and the Bank of England has to keep printing replacement currency wafers. Follow @FTMag to find out about our latest stories first and subscribe to our podcast Life and Art wherever you listen More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.We approach Christmas this year in difficult times. The Israel-Hamas war threatens to drag in other powers in the region and exacerbates divisions around the world. The Russia-Ukraine conflict lumbers on with no sign of coming to an end any time soon. And a cost of living crisis lurks in many households, affecting millions closer to home.The last of these bears a closer look. A report on poverty in the UK from The Joseph Rowntree Foundation charity tells us that one in five people lives in poverty and that number is increasing due to rising costs of fuel, inflation and limited increases in benefits. About 60 per cent of low-income households say they cannot afford an unexpected expense, more than half are in arrears in rent or paying back loans, and 70 per cent are going without essentials such as food, taking showers or buying adequate clothing.Charities are alert to the tendency to give more than usual at Christmas, the season of goodwill. Yet money only goes so far. A big part of the problem is that many people with wealth rarely know people who don’t have it.Jon Yates’s eye-opening book Fractured suggests that half of British or US people with degrees have no friends without one. People who voted against Brexit were astonished by the result of the referendum because they didn’t know anybody who was intending to vote the other way. If you are reading this as someone in a professional job, you might ask yourself: how many people do you know by name for whom life day-to-day is a desperate financial struggle? The problem is not just that the rich don’t give to the poor; it is that they don’t know the poor.In recent times, our natural tendency to club together with people who are like us has grown stronger. The increasing availability of university education created a class of people who move away from where they grew up and become more socially mobile. They tend to be more socially progressive than the other half of the UK population, who still live within five miles of where they grew up as teenagers. It has led to an increasingly divided society in which we live more distant lives from each other.All this has an effect on our democratic life. The more affluent, who do not know people in lower income brackets, are less likely to support spending on social services that benefit poorer people. In the more socially homogeneous Denmark, government spending in 2022 ran at around 50 per cent of GDP, whereas in a more polarised US it is at 38 per cent. When we become more divided we lose a sense of shared identity and community.On the other hand, there is a good deal of evidence that generosity and going out of your way to encounter those who are different is good for you. Numerous psychological studies suggest that people who engage in what are called pro-social behaviours — volunteering or spending money to benefit others — experience greater meaning in their lives. People who use their resources to benefit others tend to report a higher sense of personal worth and self-esteem.Most people in higher income brackets are money rich but time poor. In other words, a gift of money is less of a sacrifice than a gift of time. Yet the value of a gift is usually related to the element of sacrifice that goes with it. A Christmas present lovingly made with hours of effort means a great deal more than a pair of Santa and Reindeer socks bought in a random visit to Primark.So what does a step in this direction look like? The problem is that many of the places where we used to encounter those different from us have either gone into decline or disappeared. Social clubs, political parties, local pubs, even youth activities such as the Scouts or Guides have all fallen in attendance or membership. There aren’t many places where we meet those who are different these days, unless we go out of our way to do so. But there are some. Let me suggest one: church.FT FLICFind out more and support the Financial Literacy and Inclusion CampaignIf you go to church on Christmas Day, or any other day for that matter, the chances are you will find yourself sitting next to someone from a completely different social setting. Of course there are some eclectic churches that gather the like-minded. But an average local parish church is one of the few places where you might find yourself sitting next to an elderly pensioner worried about how to pay their winter fuel bills, a solicitor, a student, or a shop assistant at the local Tesco.Of course, churches are not the only place where this happens. Mosques, synagogues, temples, local food banks, sports teams and schools all offer similar opportunities. A decision to become involved as a volunteer or member at such places might lead to our learning the inner stories of those who are different from us.At the heart of the Christmas story is an odd detail that is often missed. At the birth of Christ, two groups are present — shepherds and kings. They are people from opposite ends of the social scale, both brought to Bethlehem by one event — the birth of a child who was to transform the world. As we look towards 2024, the gaps that divide us seem to be widening. But being part of a slow but growing movement of people determined to reach across them may be among the more significant gifts we can give this year.Graham Tomlin is a former Bishop of Kensington, and director of the Centre for Cultural Witness at Lambeth Palace More

Falling US petrol prices are boosting hopes that the worst wave of inflation in decades is fading, just as Joe Biden begins a campaign to convince sceptical voters that they are better off with a Democrat in the White House. The average cost of a gallon of regular gasoline could fall below $3 in the coming days, well below the record highs above $5/g struck in the summer of 2022 — a time when soaring costs for groceries and rent were also squeezing household budgets. In a nation of big cars, drivers are feeling the relief. “Oh my God, it was terrible,” said Danis, an Uber driver from Paterson, New Jersey, as he began his shift on Monday night. “It cost like $80 or more to fill my tank. Now it takes $40-$42.”Fair or not, many Americans judge their economy’s health — and a president’s performance — by the petrol price numbers that flash along streets and highways up and down the country. Pump prices help shape consumers’ mood, say analysts.“Gas prices are always displayed very prominently. And when you actually go and fill up, you’re standing there watching the number on the ticker rise,” said Claudia Sahm, a former Fed economist and founder of Sahm Consulting. You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.While gasoline’s weighting in the CPI basket is just over 3 per cent, economists believe it plays an outsized role, alongside food, in shaping expectations of future price changes.“The relationship between expectations and gasoline isn’t quite as perfect as it has been in the past. But they’re still very important,” said Gisela Hoxha, an economist at Citi. “People still face gasoline prices very often. It’s the same with food prices — you go to the grocery store all the time. While other prices do matter for inflation expectations, these are the two that consumers see very frequently.”Donald Trump and other Republican opponents of Biden seized on those inflation indicators as fuel costs soared in 2021, trying to pin the blame for the petrol price run-up on the president’s climate agenda and policies to improve car engines’ fuel economy.“The average licensed driver in America consumes about 600 gallons of gasoline a year. Nearly 80 per cent of new vehicles sold are SUVs or trucks,” said Kevin Book, head of research at Washington consultancy ClearView Energy Partners. “You don’t get reelected in America [by] putting large people into small cars.” While falling inflation and a robust labour market have made economists more optimistic about a soft landing for the world’s largest economy, public sentiment is moving more slowly.An FT-Michigan Ross poll in November showed that just 14 per cent of respondents thought they were better off under Biden. That’s despite US workers enjoying a 2.8 per cent rise in their real incomes between the third quarter of 2019 and the same quarter of this year, according to Treasury statistics.Still there are signs of hope for the White House. The more recent FT-Michigan Ross poll, from December, showed that while many people remain angry about inflation, 22 per cent of respondents — the largest share — blame oil and gas majors for the price pressures. Other polling indicates that voters’ expectations for inflation are beginning to come down too. Weeks of pump price deflation are partly behind that change, say economists. Oil market analysts think another bout of fuel price inflation of the kind seen after Russia invaded Ukraine is unlikely. Prices could even go lower. While costs differ vastly across the country — ranging from $4.58/g in California to $2.66 in Mississippi — US pump prices tend to track movements in crude oil markets. US crude prices have fallen by 20 per cent since September, pushed down by weaker than expected global demand, surging shale production in Texas, and a seasonal dip in US consumption. Recent turmoil in the Middle East has halted some of crude’s slide, but an uncertain macroeconomic climate means global oil demand growth — which hit a record high in 2023 — may be more sluggish next year. That could weigh on petrol prices just as the 2024 presidential election campaign picks up in earnest. You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.The more benign outlook for petrol prices will feed into a fairly healthy picture for the US economy as a whole. The Federal Reserve expects the country’s jobs market to stay reasonably strong in 2024, with unemployment picking up only slightly from 3.8 per cent now to 4.1 per cent. So long as wages keep rising faster than inflation, the combination should also lift public sentiment, believe economists.“People are still living with high prices, and that is something that people don’t like,” Fed chair Jay Powell acknowledged last week after the central bank’s most recent rate-setting meeting. “Wages are now moving up more than inflation, and as inflation comes down and that might help improve the mood.”If petrol costs are the most visible symbol of that improvement, the forecourt price drop could even help Biden in Republican-leaning, lower-income areas of the country, where spending on gasoline accounts for a disproportionate share of household budgets. Some of those kinds of drivers — and voters — are in parts of Michigan, Georgia and Wisconsin, swing states that will be critical in next year’s election. Gas prices in each are now well below $3/g (or about 63p per litre), and they have been trending lower in other battlegrounds such as Arizona, Nevada and Pennsylvania too, according to AAA, a motorists’ group.“People in red states do tend to do more driving on smaller disposable incomes than in blue states,” said Book. “It’s really an issue for people in the lower-middle income ranges, where there’s an intersection of limited means and a significant need for transportation.” Despite the sharp deflation in petrol prices in recent months, however, a gallon of the fuel still costs more now than it did before Biden entered the White House. And while inflation is easing for other goods, prices are still rising — just more slowly. “Gas prices are going down, but everything else is still going up,” said Hazel, who travels to her job in retail in Washington by car. “People attack Trump, but he did get some things done on the economy. With Biden it’s all been downhill.” More

(Reuters) – Nike (NYSE:NKE) on Thursday trimmed its annual sales forecast blaming cautious consumer spending, a weaker online business and more promotions, and said it plans to cut supplies of key product lines to manage costs, sending its shares down 11%.The company said it was seeking $2 billion in savings over the next three years through steps including tightening the supply of some products, improving its supply chain, reducing management layers and increasing the use of automation.Nike’s wholesale business has been under persistent pressure as retailers place fewer orders amid choppy demand. The weakness is also showing up in online sales, forcing the company to boost promotions as shoppers dwindle. Sales in China have also slowed as the economy has stumbled.”We are seeing indications of more cautious consumer behavior around the world,” Nike’s finance chief Matthew Friend said on a post-earnings call.Nike projected full fiscal-year revenue to be up about 1%, down from its prior forecast of mid-single-digit percentage growth. Analysts had expected a 3.8% increase, according to LSEG data.”Nike’s talking about reducing the number of products … perhaps the company feels there are too many products that are not high-margin and not really generating significant sales,” David Swartz, senior equity analyst at Morningstar, said.But Nike said it was also launching fresher styles to attract consumers, building on the success of recent releases like the Sabrina 1, LeBron 21 and Tatum 1 basketball shoes.”In an environment like this when the consumer is under pressure and the promotional activity is higher … it’s newness and innovation which causes the consumer to act … that’s what’s going to pull us through a promotional marketplace,” Friend said.Nike expects upcoming releases in the GT Cut, Book 1 and Kobe lines planned over the next three months to drive sales.Nike did not elaborate on which product franchises it plans to cut supplies of, but said its iconic lines of sneakers such as Air Force 1, Dunk and Court were all performing well.The company posted total revenue of $13.39 billion in the fiscal second quarter ended Nov. 30, missing estimates of $13.43 billion. Per-share earnings of $1.03 topped estimates of 85 cents, thanks to lower freight costs and inventories. As part of the streamlining, Nike expects about $400 million to $450 million in pre-tax restructuring charges, primarily tied to employee severance costs, in the third quarter.Nike shares have risen less than 5% this year, compared with a 24% rally in the S&P 500 index and a 52.5% gain for rival Adidas (OTC:ADDYY). More

SINGAPORE (Reuters) – The dollar languished near a more than four-month low on Friday ahead of a reading on a key U.S. inflation gauge due later in the day, which will provide further clarity on how much room the Federal Reserve has to cut interest rates next year.The greenback hit a five-month trough against the New Zealand dollar and a three-week low against the euro in early Asia trade, resuming its decline after a sudden bout of risk aversion in New York hours on Wednesday led to a selloff in U.S. stocks and a rise in the dollar.The kiwi was last 0.03% higher at $0.6296 after hitting a session high of $0.6298, while the euro peaked at $1.10125.Focus now turns to Friday’s U.S. core personal consumption expenditures (PCE) print – the Fed’s preferred measure of underlying inflation – for clues on how far inflation in the world’s largest economy is slowing.Expectations are for the core PCE price index to have risen 3.3% on an annual basis, as compared to October’s 3.5%.”The distribution for U.S. inflation is now considered skewed and one-sided, with a high probability of lower levels,” said Chris Weston, head of research at Pepperstone.”Hence, the Fed has increased scope to ease policy should the need arise, and while Fed officials are saying their work is not done, and the last push to get to its 2% inflation target is the hardest part, they can front load cuts far more efficiently when core PCE is at 3.5% and falling.”Against a basket of currencies, the greenback was last at 101.76, pinned near a more than four-month low of 101.72 hit in the previous session.The dollar index was on track for a weekly loss of about 0.8% and looked set to extend last week’s 1.3% decline, after the Fed left the door open to rate cuts next year at its last policy meeting for 2023.The Australian dollar dipped 0.09% to $0.6797, though remained not too far from its five-month high of $0.68035 first hit on Thursday.Sterling was little changed at $1.26905 and was headed for a marginal weekly gain, pressured by British inflation data out this week that came in well below expectations.”As inflation edges closer to target, the market will have an increased tendency to disregard hawkish comments from policymakers,” said Jane Foley, senior FX strategist at Rabobank. “This is likely to be particularly the case in the UK in view of the weakness of the economic outlook.”In Asia, the yen last stood at 142.09 per dollar, unfazed by Friday’s data that showed Japan’s core consumer prices rose 2.5% in November from a year earlier, marking the slowest pace of increase in over a year and taking pressure off the Bank of Japan (BOJ) to phase out its massive stimulus.The Japanese currency looked set to end the week largely unchanged, after the BOJ had, earlier this week, maintained its ultra-loose policy settings and offered few hints on when it could move away from negative interest rates. More

NEW YORK (Reuters) – A sudden surge in U.S. stock volatility this week prompted some traders to blame short-dated options as the culprit, though others say the popular derivatives were just one piece of the puzzle.Traders got a rude awakening on Wednesday when stocks began sliding in the middle of a sleepy afternoon session. With no market-moving news in sight, many said big trades in so-called zero-day to expiry (0DTE) options contributed to the decline, of 1.5% for the S&P 500.The benchmark index closed up 1% on Thursday, unwinding much of the previous day’s losses – a bounce some analysts said pointed to the sell-off being driven by technical factors, rather than a shift in market sentiment. Analysts cited a mix of factors such as low year-end volumes and one-sided investor positioning, with short-term options accelerating the market meltdown. “It’s kind of a cautionary tale on holiday illiquidity and low-tolerance for losing trades,” said Nomura strategist Charlie McElligott.Nevertheless, the whipsaw action highlights how 0DTE options have become a market mover this year as their popularity among retail and institutional investors has soared. While options trading volume hit a record high this year, trading in 0DTE contracts has far outpaced the growth in all other expiry terms, with these short-dated contracts making up about half of S&P 500 options trading, Cboe data from August showed.PERFECT STORM When investors buy large amounts of S&P 500 put options, as they did on Wednesday, market makers on the other side of these trades have to square their own risk by selling stock futures throughout the day.If stocks are weakening, market makers would typically sell faster to protect themselves, potentially exacerbating the downside move, as they appear to have done on Wednesday.Nomura’s McElligott believes the bearish 0DTE trades resulted in some $3 billion of stock futures being sold. At the same time, a large institutional investor was in the midst of an asset allocation trade that involved selling equities and buying bonds, which likely added selling pressure on stocks, McElligott said.Investors who were bullishly positioned for a “crash up” in stocks were caught wrong-footed, creating fertile conditions for the sharp reversal, he said.Joe Mazzola, director of trading and education at Charles Schwab (NYSE:SCHW), agrees that a mix of factors drove the sell-off with the options helping supercharge the selling.”What happened is you had stretched sentiment, you had low liquidity coming into the day and then once people kind of realized that everybody’s on the same side of that one trade and you got that catalyst (0DTE options trades) … that’s what caused that move, that air pocket,” Mazzola said.Some analysts worry similar volatile episodes may lurk around the corner, especially as the year winds down, with low expected volumes.Matthew Tym, head of equity derivatives trading at Cantor Fitzgerald, is concerned that many of the factors behind the recent sell-off could reemerge.”If we do get into a situation where we really do have bad news in the marketplace, 0DTE could really start to exacerbate the sell-off,” he said. ” We could get into another situation like the flash crash that we had almost a decade ago.” More

The talks failed over competing visions as BlackRock wanted a majority stake in the firm, but Warburg Pincus had no desire to relinquish control, according to the report. Discussions about a potential partnership between the two companies were serious but short-lived and never reached the point of discussing a price or a formal structure, the report added.BlackRock and Warburg Pincus declined to comment. More

According to the central bank, the rules establish the definition of technical concepts and regulate the possibility of credit portability for credit card debts and other payment instruments.The council “simply (regulated) what had passed into law,” Finance Minister Fernando Haddad told journalists, adding that the new framework will reduce interest rates he called “stratospheric.”In early October, Congress passed a law mandating credit card issuers and similar actors to propose self-regulation measures to the monetary council to reduce credit costs. But no consensus was reached among the issuers, so the 100% cap, which had been outlined in the law as a fallback, became effective.The move sets out to curb high default rates on revolving credit card lines, which the government claims lead to snowballing debt, particularly among the poorer population.The revolving credit card interest rate in Brazil is 431.6% per year, or 14.9% per month, according to the latest data from the central bank, by far the most expensive type of credit for individuals.Consumers bear this fee when they do not pay the entire credit card bill, with the remaining amount subject to interest. The central bank established in 2017 that consumers are restricted to a maximum of 30 days on this line.After this period, those who fail to settle the due amounts fall into the installment with interest credit card line, with interest rates of 195.6% per year, equivalent to about 9.5% per month. More