Brazil Gives Exporters a Break Offering Credit in Foreign Currencies

    Dollar, euro, yen

    Dollar, euro, yen The Brazilian central bank will offer credit lines in foreign currencies as of next week in a bid to ease a credit crunch afflicting the country's exporters, the bank's president, Henrique Meirelles announced on Friday, October 17.

    The central bank chief said the first such auction will take place on Monday, October 20, and it will accept Brazilian sovereign bonds as collateral for the loans. The size of the credit lines and terms of the loans will be determined at each auction.

    Starting with the second auction, it will accept sovereign bonds from other countries as long as they have a minimum credit rating of A. In addition to the sovereign bonds, banks can also use export receivables as collateral for the loans.

    The bank will also mandate that financial firms drawing on the funds use them to extend credit to exporters.

    The government of Brazil last week allowed the central bank to extend credit lines in foreign currencies to local financial institutions and also loans through its discount window as it seeks to add liquidity to the domestic financial system.

    However, officials, including President Luiz Inácio Lula da Silva, have complained in recent days that banks drawing on those funds were investing them in high-yielding government bonds instead of lending them to companies in need of credit.

    Meantime, Finance minister, Guido Mantega, said that despite the deterioration caused by the global financial crisis, Brazil will grow between 4% and 4.5%.

    Brazil's economy has grown rapidly in recent years but its financial markets have taken a thumping since the financial crisis took a turn for the worst after the collapse of US Lehman Brothers Holdings Inc in September.

    "I still believe that we can keep growth between 4% and 4.5% for next year" Mantega told television station Globo News.

    In September, he had forecast Brazil's economy would expand 5% this year and 4% in 2009.

    Mercopress

    Tags:

    • Show Comments (2)

    • ch.c.

      continued…….
      meaning that :

      1) Brazil will accept foreign sovereign bonds from…….. but Noooooooone issued by Mercosur brothers.
      2) The Mercosur Government brothers would not accept foreign sovereign Brazilians Bonds, should they use also the single A minimum rating as a base.

      3) Brazil will accept foreign sovereign bonds…. but NOT those issued from the Venezuela cousin.
      4) Venezuela cousin would not accept foreign sovereign Brazilian Bonds, should they use also the singlke A minimum rating as a base.

      5) Brazil will accept foreign sovereign bonds from…….. but none issued from any South American country.
      6) No South America country would accept foreign sovereign Brazilian Bonds, should they use also the single A minimum rating as a base.

      What a Great Trust you have against each other ! Truly the new UNSURE Club, formed just about a few months ago.

      Last but not least, this is only for debts issued in FOREIGN debts by these Governments !

      Because obviously, it is NOT ANY BETTER for Governments debts issued in…LOCAL CURRENCIES !!!!!!!!

      CONCLUSIONS :
      – every South American country consider ALL the other South American countries as JUNK !!! Otherwise YOU would have applied
      the S&P rating definition !
      – Brazil consider THEIR OWN RATING given by S&P as JUNK, since they will not accept any foreign sovereign debts rated BELOW Single A. And Brazil is rated LOWER than A !!!!!!!!

      Hmmmmmmmm…who could prove me wrong ?
      AES, AES, AES….where are you ???????

      Then of course, I cant be wrong either when I call so many Brazilians………JUNKIES !!!!!!!!!

      D 😉 😀 😉 😀 😉

      Ohhhh even more funny, around the world, banks still provide LOANS when collateral are in MOST South Americans Governments FOREIGN OR…..OR EVEN LOCAL CURRENCIES DEBTS , but the Brazilian Government has MORE loans restrictions for their OWN companies….THEY APPARENTLY WANT TO HELP !!!!!!!!!

      What a backward country Brazil is !

      LAUGH….LAUGH….LAUGH….LAUGH….LAUGH !!!!!!

    • ch.c.

      it will accept sovereign bonds from other countries as long as they have a minimum credit rating of A.
      Funny, that they will accept foreign sovereign bonds ONLY with rating HIGHER than…..BRAZIL !!!!!!
      That means that if other emerging countries with similar rating than Brazil do the same, BRAZIL Government bonds would NOT BE ELIGIBLE….since Brazil rating is lower than A !!!!!!!!!!!!!!!

      Just think about it !

      Hey hey

      😀

    Your email address will not be published. Required fields are marked *

    comment *

    • name *

    • email *

    • website *

    This site uses Akismet to reduce spam. Learn how your comment data is processed.

    Ads

    You May Also Like

    Brazil’s Açaí­ Berry Shown to Kill Cancer Cells in Florida University Study

    A Brazilian berry popular in health food contains antioxidants that destroyed cultured human cancer ...

    US Inflation Brings Brazilian Stocks Tumbling Down

    Brazilian stocks plummeted, in line with the U.S. market, as investors reacted to disappointing ...

    Energias de Portugal

    Portugal Company Has Energy Plans for Brazil Including Wind Power

    Portuguese energy sector company Energias de Portugal (EDP), is discussing with the Algerian Sonatrach ...

    Brazilian Chief Justice Cezar Peluso

    Brazil Supreme Delays Decision on Giving Watchdog Agency Punitive Power

    Brazil’s Supreme Court has delayed a decision on the most eagerly awaited case on ...

    In Brazil You Have Degrading Labor and Then, Way Down, Slavery

    Most of the victims of slave labor in Brazil are illiterate males, according to ...

    Brazilian Guinea Pigs Got US$ 5 to Be Bitten by 100 Mosquitoes a Day

    Brazilian Senator Cristovam Buarque (PDT party, Federal District), president of the Senate Human Rights ...

    Rescuer collect body and body parts at the tragedy's scene

    Brazil Aviation Workers Blame Air Tragedy on Airlines Greed and Government Neglect

    Brazil's National Federation of Civil Aviation Workers and central trade unions that represent the ...

    Brazil: Guns Couldn’t Silence Her

    I found his body covered in blood. I took his hand, cleaned his eyes ...

    Brazil’s Airline Sector Is No Flight of Fancy

    Last month we looked at the steel sector in Brazil, reviewing how prospects for ...