UPDATE 1-Brazil's BNDES says likely to reduce 2015 loan disbursements
(Adds comments by Coutinho, forecast)
BRASILIA, April 14 (Reuters) - Brazil's state-run development bank BNDES will likely moderate loan disbursements in 2015 as part of recent government efforts to prevent public debt from rising, BNDES President Luciano Coutinho told senators at a hearing on Tuesday.
He did not provide an estimate. Last week, the bank's head of infrastructure, Nelson Siffert, estimated loan disbursements could reach 170 billion reais ($55.5 billion) in 2015, down from 187.8 billion reais in the previous year.
BNDES has been practically Brazil's sole source of long-term corporate credit since its inception, in 1952. The bank's operations grew dramatically during President Dilma Rousseff's first term between 2011 and 2014 as policymakers scrambled to spur investment and jump-start economic growth.
While that strategy did not prevent Brazil's economy from slowing down, it fueled an increase in public debt that raised the threat of a sovereign downgrade by ratings agencies.
"There may have been some mistakes in fine-tuning, but the strategy was adequate," Coutinho said.
Coutinho said benchmark interest rates tend to drop in the longer term after a recent increase by the central bank to tame inflation. The exact timing, however, remains unclear.
"I don't know how many years this process can take, but it will not last forever," he said.
He added that the bank's loan book is not too big when compared with those of international peers, and said the disclosure of details about loans follows international standards. (Reporting by Silvio Cascione and Alonso Soto; Editing by Steve Orlofsky)
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