State Loans Give Lula Successor More Inflation: Brazil Credit
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Brazil’s state development bank is charging the least relative to the country’s benchmark interest rate in 18 months, a sign President Luiz Inacio Lula da Silva’s successor may struggle to keep inflation in check.
The difference between the central bank’s 10.75 percent overnight Selic and the government lender’s long-term rate that monetary authorities agreed last week to keep at 6 percent grew to 475 basis points from 275 in March, as policy makers boosted borrowing costs to contain price increases. The gap is the largest since March 2009 when it was at 500 basis points.