BRAZIL – The Brazilian government hopes to borrow $ 4 billion from multilateral lending organizations to finance expenses related to the coronavirus crisis, including additional emergency payments and other social support programs.
According to economic ministry documents seen by Reuters on Monday, the funds will be used in part to expand the Bolsa Familia conditional cash transfer program for low-income families and to cover unemployment benefits for workers whose contracts are suspended or working hours are reduced.
At Monday’s exchange rate, the loan will correspond to around 21.9 billion reais.
Brazil will each seek $ 1 billion from the Inter-American Development Bank, the World Bank and the New Development Bank from the BRICS group of the leading developing economies.
Another $ 420 million will be requested from the German development bank KfW, $ 350 million from the Andean Development Corporation and $ 240 million from the French Development Agency.
Economy Minister Paulo Guedes and his team have chosen to borrow rather than issue bonds in international markets because the perception of risk in the market has increased and costs have increased.
The economy ministry did not immediately respond to requests for comment on Monday.
Last week, Finance Minister Mansueto Almeida said Brazil had no problem financing itself on the domestic market with short-term debt, but the premiums for bonds that were due in three years or more were very high. (Reporting by Marcela Ayres Writing by Anthony Boadle; Editing by Tom Brown)
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