Olympic Host Rio Has Debt Paid by Brazil as States Struggle
- Recession and oil crash have shrunk Rio’s tax revenue
- Treasury says it has funds to cover government-backed debt
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Brazil’s Treasury covered the foreign debt that Rio de Janeiro state failed to pay amid its budget crunch, raising the specter of additional bailouts by a cash-strapped federal government.
The Treasury paid the 8 million reais ($2.24 million) Rio owed to French development agency AFD, Treasury Secretary Otavio Ladeira told reporters in Brasilia. He said the Treasury has the funds to cover state debts that are guaranteed by the government.