Loading ...News - Brazil to counter meltdown with more state aid
SAO PAULO, Brazil (AP) - Brazil will unveil new measures this month to stimulate its slumping economy, President Luiz Inacio Lula da Silva said Monday.
One move will free up credit for the private sector from Brazil’s National Development Bank, Silva said during his weekly radio show.
Speaking later to reporters in Sao Paulo, Silva said the government “will have more measures to announce this month” but declined to offer specifics.
His comments did little to soothe jittery investors. Brazil’s benchmark Ibovespa index plunged 3.6 percent to 40,062 in afternoon trading after Silva spoke, and the nation’s currency fell against the dollar.
Silva also warned during his weekly radio address that the first quarter of 2009 will be tough for Latin America’s largest economy, which was booming before the global meltdown hit in October.
Brazilian industry and agribusiness that depend heavily on exports have been hit hard by falling international demand for the nation’s products.
The government has already freed up billions of dollars in emergency credit lines and tax breaks to help prop up the private sector.
And last Friday, state-owned Banco do Brasil SA said it will pay 4.2 billion reals ($1.8 billion) for a stake in the banking unit of one of the nation’s biggest conglomerates to help ease credit in Latin America’s largest economy.
The bank will buy a 50 percent share in Banco Votorantim SA, owned by family-controlled Grupo Votorantim.
Banco Votorantim is a major provider of car loans and credit to corporations and large businesses that have found it hard to get financing amid the global economic crisis and credit crunch.
Source: The Associated Press.
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