BRASILIA, July 31 (Reuters) - The Brazilian government on Thursday raised by 30 billion reais ($13.25 billion) to 80 billion reais the amount of subsidized loans that the state development bank BNDES can disburse under an investment stimulus program.
Under the Investment Support Program, known as PSI, several industries can borrow cash from the BNDES at below-market interest rates. The rate differential or costs stemming from the difference between the rate that BNDES pays to borrow and the one it charges clients will be covered by the country’s treasury.
“The measure is to continue with efforts to accelerate the economy,” said Joao Rabelo, the undersecretary of economic policy at the Finance Ministry.
The increase in the offer of subsidized loans comes at a time when the government is struggling with a slowdown in tax revenues that could jeopardize its key fiscal goal for the year.
Rabelo declined to detail how the treasury will finance the rate differential.
The measure, which was approved by the country’s National Monetary Council, will increase the credit lines for the purchase of buses, trunks and machinery, the official said. ($1 = 2.2634 Reais) (Reporting by Luciana Otoni; Writing by Alonso Soto)