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Investor Presentaiton

Annual Report AR 2022 SUMMARY WHO WE ARE OUR STRENGTH AND OUR RESOURCES OUR RESULTS Report by the Governor Throughout 2022, economic activity in Brazil carried on its recovery. The international scenario, however, was characterized by global growth deceleration, driven by the tightening of financial conditions in the major economies, the difficulties in the energy supply to Europe, as well as the challenging environment for growth in China, partially reflecting policies to face Covid-19. In the domestic scenario, the Banco Central do Brasil (BCB) was able to quickly identify the persistent nature of inflation and timely started the monetary tightening cycle in March 2021. As a result, a process of inflation reduction is underway. It is important to emphasize that the monetary tightening process should ensure the convergence of inflation to the limits established by the inflation target framework. It is also the BCB's role to safeguard financial stability with a close eye on the key risks and on the resilience of the National Financial System (SFN). Analyses conducted by the BCB indicate an increased confidence degree of market participants in the SFN resilience. Looking at the relevant challenges for the Brazilian economy, it is clear the importance of promoting a sustainable and inclusive economic growth. For this purpose, the BCB has undertaken several initiatives within the scope of its strategic agenda, the Agenda BC#, which is organized in five dimensions: inclusion, competitiveness, transparency, education, and sustainability. In 2022, it is worth mentioning the performance of the Brazilian instant payment system (Pix) and its new facilities "Payments Starter", the "Pix Saque" (Withdrawal using Pix), and the "Pix Troco" (Change in cash paying by Pix). Pix transactions exceeded more than 30 billion transactions, involving more than 141 million users, in only two years of existence. Pix plays an important role in enabling new business models and fast payments as well as promoting people's financial inclusion. The BCB considers that this financial inclusion will be effective only if associated with financial education. One initiative that illustrates this belief was the Aprender Valor program, whose expansion at the national level has the potential to provide financial education to more than 20 million students from public elementary schools. The progress in the implementation of the Open Financial System (Open Finance) is also noteworthy. It enables consumers of financial services to use their financial information to their benefit. Open Finance has contributed to increasing the quality and quantity of services provided by financial intermediaries, while favoring the reduction of prices charged for these services. In fact, the continuous evolution of Pix and Open Finance are the foundations of a new financial services ecosystem in Brazil. In this regard, studies and discussions for the creation of the Digital BRL illustrate the natural evolution of the Agenda BC#. This Report is part of the BCB's accountability in 2022 and is structured in three chapters. The chapter "Who we are" presents a description of the BCB organization, its governance and strategy. The chapter "Our Strength and Our Resources" deals with the evolution of the BCB's capacities and resources devoted to the development of its activities. The most valuable resources are not only the strong sense of commitment and duty of our workforce, the knowledge they have and the network of relationships they maintain, but also technological, financial, infrastructural, and natural resources. The chapter "Our Results" presents the main achievements and benefits these results produced for the Brazilian society. Finally, I assure the integrity of this Annual Report, prepared with the participation of the various areas of the BCB. The Portuguese version was approved by the Governance, Risks and Controls Committee of the BCB, pursuant to Vote 16/2023-BCB, of March 16, 2023, and was made available to society and to the Federal Court of Accounts (TCU), as required by law. Unless otherwise stated, if any discrepancy arises due to translation, the Portuguese version shall prevail. Enjoy the reading. Roberto Campos Neto Governor 3
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