Brazil’s Policy Response to Covid-19
Originally published by Ministry of Economics, Foreign Trade and International Affairs Secretary for International Economic Affairs International Financial Markets Unit on 13/04/2020
Increase in credit lines: state-owned Federal Savings Banks (Caixa), Banco do Brasil, and the National Development Bank (BNDES) announced several measures, such as an increase in credit lines to small-and medium-sized firms aimed at working capital. The banks have also cut interest rates and in some cases offered clients a grace period of 90 days for payment.The objective is to inject money in the financial system and stimulate the economy. Caixa estimates to extend in R$ 108 billion (or US$21.6 billion) its credit lines. The Banco do Brasil increased in R$ 100 billion (or US$ 20 billion) its credit lines. The National Development Bank (BNDES) suspended the amortizations of R$ 19 billion (US$ 3.8 billion) loans for direct operations and R$ 11 billion (US$ 2.2 billion) for indirect operations. The Bank is studying a new emergency credit line of R$ 40 billion (US$ 8 billion) to micro, small and medium companies.