Other Economies

Sum of Measures 1—5 (Total Package)

Total Package in USD Million: 491,144.38
% of GDP (2019): 33.32%
% of Regional Total Package: N/A
Package Per Capita in USD: 2,344.71
Note: Measures 9 and 10 are added to the sum of Measures 1-5.
Measure Amount (Local) Amount (USD) Details Update Source
01 - Liquidity Support info_outline BRL552,493,781,818 USD113,141,326,324
01A - Short-term lending info_outline

No amount/estimate: The central bank also opened a facility to provide loans to financial institutions backed by private corporate bonds as collateral;

01B - Support policies for short-term lending info_outline BRL288,800,000,000 USD59,141,326,324

(i) March 16, the reserve requirement on time deposits was reduced from 31% to 25% and restrictions on applying reserve requirements to the Liquidity Coverage Ratio were relaxed; BCB estimates the effect will be to increase lending by BRL 135 billion; (ii) March 26, the reserve requirement on time deposits was reduced further from 25% to 17%; BCB estimates the effect will be to increase lending by BRL 68 billion; (iii) March 26, the upper limit of the repurchase of Financial Letters of their own issuance for bank from Segment S1 was raised from 5% to 50%; BCB estimates an increase in liquidity of BRL 30 billion; (iv) No amount/estimate: June 23, BCB reduced the Risk-Weighting Factor (FPR) from 50% to 35% for Time Deposits with Special Guarantees (DPGE) exposures when the depositor is an institution associated with the Credit Guarantee Fund (FGC); (v) June 23, BCB now allows credit operations for financing working capital for companies with annual sales of up to BRL50 million contracted from June 29 to December 31, 2020 to be deducted from compulsory reserve requirements on saving deposits for a period of 3 years; the measure has maximum estimated potential increase to lending potential of BRL55.8 billion.

01C - Forex operations info_outline BRL263,693,781,818 USD54,000,000,000

(i) The central bank has intervened various times in the foreign exchange market since mid-February (both with spot and derivative contracts sales), by a total of nearly USD45 billion (10% of gross reserves) as of May 28; (ii) The central bank is resuming repo operations of Brazilian sovereign bonds denominated in US dollars, having released USD9 billion into the money market thus far.

02 - Credit creation info_outline BRL1,576,000,000,000 USD322,737,985,755
02A - Financial sector lending/funding info_outline BRL120,000,000,000 USD24,573,958,306

(i) No amount/estimate; June 23, BCB announced conditions for purchase of private financial assets in secondary markets, namely that assets with credit risk equivalent to BB- or higher, in a central depository, not convertible into shares, and with a maturity of 12 months or more will be eligible; (ii) July 16, BCB announced the Working Capital Program for the Preservation of Companies (CGPE) that provides access to credit for companies with revenues up to BRL 300 million; BCB estimates the CGPE can increase credit to these companies by BRL 120 billion; (iii) No amount/estimate; July 21, the BCB announced that it will regulate the CGPE--loans will be for a minimum of 36 months, with a minimum grace period of 6 months for the beginning of debt amortization; at least 80 percent of the program is targeted at smaller companies with annual revenus up to BRL100 million; new CGPE loans cannot have higher interest rates or terms longer than the original transaction; the value of the collateral pledged must observe the regulatory limit applicable to the original transaction.

02B - Support policies for long-term lending info_outline BRL1,451,000,000,000 USD297,140,112,519

(i) The central bank lowered the policy rate (SELIC) by 50bps a historical low of 3.75%; (ii) March 26, the New Term Deposit with Special Guarantees (NDPGE) was introduced as a new financing tool for financial institutions associated with the Credit Guarantee Fund (FCG). This is expected to raise credit supply by BRL 200 billion; (iii) March 26, the BCB offered loans backed by debentures to financial insitutions through the Temporary Liquidity Line; this is expected to increase credit by BRL 91 billion; (iv) March 26, the BCB allowed the temporary exemption of tax effects arising from overhedge of equity investments held abroad being deducted from equity -- This provides sufficient capital relief from currency depreciation that BCB estimates an increase of BRL 520 billion in credit creation; (v) BCB reduced the factor applied to calculate the Capital Conservation buffer from 2.5% to 1.25% through March 2021 with gradual reversal until March 2022; BCB estimates this provides capital relief of about BRL 56 billion and increases credit supply by BRL 640 billion; No amount/estimate: (vi) April 24, the Banco Central de Brasil (BCB) raised the limit on collateralized lending for cooperative banks; (vii) On May 6, The central bank decided to lowered the Selic rate to 3% p.a; (viii) May 29, BCB announced an extension of dividend restrictoins until December 2020 and temporary easing of rules on real estate financing; (ix) June 2, BCB announced it would maintain the countercyclical capital buffer addition at 0% for at least 1 year; (x) No amount/estimate: June 17, BCB announced a 0.75% cut in the Selic rate to 2.25%; (xi) No amount/estimate: July 28, the Securities and Exchange Commission (CVM) extended the suspension of requirement that a new public offering cannot occur within 4 months of the closing of a previous offering; (xii) No amount/estimate: August 5, BCB announced a 0.25% cut in the Selic rate to 2%

02C - Loan guarantees BRL5,000,000,000 USD1,023,914,929

(i) June 2, Ministry of Ecoomy provides BRL5 billion immediately and up to BRL20 billion in loan guarantees available to financial agents that lend to small and medium sized enterprises.

03 - Direct long-term lending info_outline
03A - Long-term lending info_outline
03B - Forbearance

No amount/estimate: (i) Local firms affected by the crisis were granted a 3-month moratorium on bank loan repayments (principal and interest); (ii) Exporters’ inventory financing is being supported by extending maturities for existing and new export rediscount credits; (iii) Debt enforcement and bankruptcy proceedings (except in alimony cases) have been suspended; (iv) June 23, the Ministry of Economy suspends for up to 6 months payment to the Board of Trustees of the Severance Pay Fund (FGTS) from private urban public transport companies; the impact of suspended payments is approximately BRL51 million (entered in category 5B).

04 - Equity support info_outline
05 - Government support to income/revenue BRL269,871,412,727 USD55,265,073,703
05A - Health BRL28,788,040,000 USD5,895,300,789

(i) An additional 0.4% of GDP have been assigned to the public healthcare system, in addition to transfers to state and municipal governments who bear the main responsibility for public healthcare; (ii) Taxes and import duties on goods used by hospitals have been zeroed and import procedures eased. (iii) Field hospitals are being built and efforts are underway to procure respirators and augment ICU capacity; (iv) The Health Ministry opened 5,800 vacancies for doctors; (v) Resident doctors will receive a 20% bonus, worth USD 130.

05B - Non-health BRL241,083,372,727 USD49,369,772,914

(i) Announced a comprehensive fiscal package worth USD30 billion, that includes expansion and front-loading of social assistance/benefit payments; (ii) expanding the Bolsa Familia program with the inclusion of over 1 million more beneficiaries, cash transfers to informal and unemployed workers, and advance payments of salary bonuses to low income workers; (iii) USD1.5 billion to finance two months of payroll for firms impacted by COVID-19; (iv) Announced several measures, which include bringing forward the 13th pension payment to retirees, expanding the Bolsa Familia program, providing an emergency cash transfer to households; and (v) Introducing temporary tax breaks and credit lines through the state-owned banks, lowering taxes and import levies on essential medical supplies, and assisting state and local governments; (vi) June 23, the Ministry of Economy suspends for up to 6 months payment to the Board of Trustees of the Severance Pay Fund (FGTS) from private urban public transport companies; the impact of suspended payments is approximately BRL51 million (see Category 3B for link); (vii) No amount/estimate; June 19, the National Treasury updated the Manual for Instruction of Claims (MIP) to include specific guidelines and procedures under the Complementary Law No. 173/2020 that established the Federative Program to Combat Coronoavirus and altered the Fiscal Responsiblity Law (LRF) by waiving limits placed on "the Union, the States, the Federal District and Municipalities" in the event of a "public calamity"; (viii) June 30, the Ministry of Economy announced extension of emergency aid for another 2 months to 64.3 million Brazilians, who receive an additional BRL600 per month (total = 64.3 million x BRL600 x 2 months = BRL77.16 billion; (ix) July 3, the Ministry of Economy announced a reduction in the IOF tax rate on credit operations had been extended 90 days; the estimated tax waiver for the 90 days is BRL7.051 billion; (x) July 14, the Ministry of Economy announced extension of the validity period of Negative Debt Certificates (CND) and Positive Certificates with Negative Effects (CNEND) for another 30 days, both relating to federal tax credits; (xi) July 29, Ministry of Economy announced the Aldir Blanc Law that provides amergency aid of BRL600 for people working in cultural establishments such as independent theaters, circuses, cinema clubs, cultural spaces in indigenous areas and popular festivals; total estimated expense is BRL3 billion; (xii) No amount/estimate; August 6, Ministry of Infrastructure announced cancellation of the USD18 per ticket International Boarding Fare, starting in 2021;

06 - Budget reallocation info_outline
07 - Central bank financing government

May 7, Brazil's Congress approved a constitutional amendment to enable BCB to implement quantitative easing program.

07A - Direct lending & reserve drawdown
07B - Secondary purchase: government securities
08 - International Assistance Received BRL312,574,795,818 USD64,010,000,000
08A - Swaps info_outline BRL292,993,090,909 USD60,000,000,000

The Fed has arranged to provide up to USD60 billion to the central bank through a swap facility that will remain in place for the next six months; as of August 6, BCB has not borrowed from the Federal Reserve's swap facility

08B - International loans/grants BRL19,581,704,909 USD4,010,000,000
08B1 - Asian Development Bank
08B2 - Other BRL19,581,704,909 USD4,010,000,000

(i) May 29, USD4.01 billion in loans from the French Development Agency (AFD), Inter-American Development Bank (IDB), World Bank, Development Bank of Latin America (CAF), German Development Bank (KfW), and New Development Bank (NDB) for emergency income support programs; these expenses have already been incurred by the Brazilian government.

09 - International Assistance Provided
09A - Swaps info_outline
09B - International loans/grants
10 - No breakdown
11 - Other Economic Measures

(i) With congress declaring a state of “public calamity” on March 20, the government’s obligation to comply with the primary balance target in 2020 has been lifted. (ii) Proposed a bill creating a separate budget (“war-budget”) to expedite fiscal relief assistance and authorize the central bank to buy and sell government and corporate debt securities among other extraordinary measures. (iii) Pandemic leads 76% of Brazil’s industrial sector to cut production. (iv) Brazil’s government lowered its 2020 economic outlook on Wednesday, forecasting a gross domestic product contraction of 4.7%, which would signal the country’s biggest economic crash in more than a century. (v) July 14, the Ministry of Economy announced the extension of the proportional reduction of work and salary agreements and temporary suspension of the Benefit's employment contract via the Emergency Preservation of Employment and Income (BEm)

12 - Non-Economic Measures

(i) Several travel restrictions for individuals coming to Brazil (Venezuela, Argentina, Bolivia, Colombia, French Guiana, Guyana, Paraguay, Peru, and Suriname, Uruguay, the People’s Republic of China, the European Union member states, Iceland, Norway, Switzerland, the United Kingdom & Northern Ireland, Australia, Japan, and Malaysia); (ii) Brazil’s population has been advised to stay at home in self-isolation as much as possible; (iii) Businesses have largely adhered to this policy and have requested that their employees work remotely or take early vacation; (iv) No nationwide lockdown, but 23 of Brazil's 27 federative units (states) have imposed confinement measures; (v) Schools are not closed nationwide, but several states and municipalities have closed educational institutions. For example, in São Paulo, schools have been closed since 23/3.