Brazil raises key BNDES rate for the first time in nearly two years
BRASILIA Dec 19 (Reuters) - Brazil's main economic policymaking body on Friday raised for the first time in almost two years the interest rate at which state development bank BNDES pegs its loans, in a bid to trim billions of reais in subsidies that are weighing down public finances.
The CMN, as the policymaking body is known, hiked the so-called TJLP rate to 5.5 percent from a record low 5 percent. The TJLP rate was kept unchanged since January 2013 as President Dilma Rousseff sought to jumpstart Brazil's stagnant economy by offering subsidized credit to local companies.
In a statement released by the finance ministry, the CMN also earmarked an additional 50 billion reais ($18.8 billion) to a program to spur investments known as PSI. The interest rates linked to the PSI program will also be adjusted, the statement said.
($1 = 2.659 Brazilian reais) (Reporting by Luciana Otoni; Writing by Guillermo Parra-Bernal and Alonso Soto; Editing by Chris Reese)
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