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Wednesday, June 6, 2012

Brazil's BNDES Cuts Interest Rates For Micro, Small Businesses

RIO DE JANEIRO--Brazil's economy is solid and has the capability to grow in the long term, the president of the country's National Development Bank said Tuesday as he announced interest-rate reductions on credit lines for micro, small, medium and large businesses.


Speaking with reporters, BNDES President Luciano Coutinho said that the cuts are meant to stimulate investments.

Brazil's rate of investment slid in the first quarter amid global economic uncertainties.

"More investments will help Brazil's economy grow at its full potential," Mr. Coutinho said.

The BNDES is seeing signs that the private sector, especially the struggling industrial sector, will increase investments in the coming months, Mr. Coutinho added.

Stimulus measures such as tax cuts recently implemented by the government are also "maturing," Mr. Coutinho said.

The BNDES expects the interest-rate reductions to also create demand for financing that will generate competition among private-sector banks, helping reduce banking spreads, Mr. Coutinho said.

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