BNDES's largest program slashed by $7.8 billion

The main program of the Brazilian Development Bank (BNDES), the Investment Sustainability Program (PSI in the original acronym) designed to attract investment from companies has faced a cut of $7.8 billion in this year's budget. The National Monetary Council (CMN) approved a reduction in the credit limit for the program from $12.8 billion to $5 billion.

According to the Finance Ministry, the measure was taken in an attempt to help the country recover fiscal balance and to bring the PSI's budget in line with the recruitment pace, which had been slowed down as a result of an increase in interest rates. The step is expected to raise, in the upcoming years, $230 million in the funds used by the National Treasury to cover the gaps between subsidized interest rates and market rates.

Created in 2009 as a means to stimulate the economy, the PSI provides funding for the purchase of capital goods (machines and equipment), investment in innovation and exports. The limit cuts for each line of credit was determined by the BNDES.

Translated by Fabrício Ferreira