ANNOUNCEMENT 11 Dec 2013In December 2013, the government of Brazil announced a change in private-sector financial support.
NUMBER OF INTERVENTIONS
Ministry of Finance (Ministerio da Fazenda) news item of 11 December 2013 (in Portuguese): http://www.fazenda.gov.br/divulgacao/noticias/2013/dezembro/mantega-anuncia-prorrogacao-do-programa-de-sustentacao-do-investimento-para-2014
Reuters Brazil news item of 11 December 2013 (in Portuguese): http://br.reuters.com/article/topNews/idBRSPE9BA04720131211?pageNumber=2&virtualBrandChannel=0&sp=true
Provisory measure no. 633 of 26 December 2013 (in Portuguese): http://www.planalto.gov.br/ccivil_03/_Ato2011-2014/2013/Mpv/mpv633.htm
On 11 December 2013, Brazil's Ministry of Finance released a statement saying that it is going to extend the Investment Support Program (PSI) in 2014 and that it had to adjust the associated interest rates since Brazil's central bank's official interest rate, known as SELIC, had increased. The adjustments notwithstanding, the Ministry of Finance added that the interest rates will remain attractive.
The main interest rate adjustments for credit lines are set as followed:
The Investment Support Program (PSI, Programa de Sustentaçăo do Investimento) offers through the Brazilian Development Bank (BNDES) credit lines at favorable interest rates under the condition of local content requirements. The project had been introduced in mid-2009 when financial support was scarce. For the year 2014, the PSI received a budget of 372 billion Real (US$ 167 billion). An increase of 50 billion Real from 2013.
This measure, i.e., provisory measure no. 633/2013, took effect on 26 December 2013.
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries.