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Finance Minister Haddad Announces $10bn Flood Relief Plan

BRAZIL
  • Finance Minister Haddad announced a relief plan worth BRL50.9bn ($9.9bn) today to help the victims of the floods in the state of Rio Grande do Sul. Of this, only BRL7.7bn will have an impact on the primary budget, he said, adding that this will be considered extraordinary expenditure and therefore will be excluded from the public spending cap and fiscal target.
  • The measures, which include subsidised credit lines from the government, will be directed to 3.5mn people in the state. Haddad added that the money for the plan will not harm programs that serve other regions of Brazil. President Lula also said that more aid will be announced next week.
  • Separately, Haddad said that he sees as natural the ongoing technical debate regarding the BCB rate cut and would not comment on the decision until he has seen the minutes of the meeting. Swap rates have edged lower this afternoon, but remain 20bp higher at the long end on the day, following the hawkish Copom meeting. BRL remains 1.4% weaker vs. the dollar.

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