‘Insane’ Rates Spur Mantega to Gut BNDES Funding: Brazil Credit
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Brazil plans to cut funding for its state development bank by 50 percent next year in an effort to bring down the world’s second-highest inflation-adjusted interest rates.
The reduction in loans the government provides to BNDES, as the bank is known, forms part of a plan to curb public spending, Finance Minister Guido Mantega said in an interview in Brasilia yesterday. Mantega, who was kept at his post by President-elect Dilma Rousseff, is seeking to cut subsidized lending that helped push inflation to a five-month high of 5.2 percent and drive up local borrowing costs.