Just in Case Brazil Gives Economy a US$ 164 Billion Vaccine

Truck at the Imigrantes road Brazil has already injected an estimated US$ 164 billion, mostly into banks and corporations, since the beginning of the financial downturn, according to the Brazilian official news agency, Agência Brasil.

The financial effort has concentrated on four areas: reduction in banks technical deposits; interventions in the money exchange market to contain the US dollar; cut or elimination of taxes and credit lines for corporations and consumers.

Agência Brasil estimates that 60% of those authorized government resources went straight to the financial system.

Since the first financial problems the Brazilian government targeted restabilizing credit to productive activities as the main priority, and then authorized the reduction of banks technical deposits, that is funds banks must hold at the Central Bank or to back up loans.

This mechanism enabled the liberation of an estimated US$ 44 billion, which helped pump liquidity to the system.

However markets did not recover their full dynamics according to the all powerful Confederation of National Industries and the São Paulo Federation of Industries.

Brazilian President Luiz Inácio Lula da Silva admitted there have been delays in the reactivation of financing but he attributed to the time that elapses before the practical implementation of measures.

Agência Brasil also reveals that since the beginning of the financial turbulences the Bank of Brazil sold US$ 53 billion in the money exchange market in an attempt to keep the US dollar from appreciating too much. The local currency real has lost 32% of its value against the dollar.

Over half those funds were future contracts, or swaps which have the backing of government but do not affect reserves.

Besides swaps the Brazilian central bank sold US$ 9.8 billion of its international reserves, which now stand in the range of US$ 200 billion.



  • Show Comments (9)

  • Falupa

    Fighting the recession
    It will still be tough for the Brazilian gov. to fight the recession no matter how hard they try. Good luck making a turn around, Brazil… I just hope that they can find the money to make such an infusion of cash. Many countries are going to go Bankrupt from this recession.

  • ch.c.

    Furthermore on “Just in Case Brazil Gives Economy a US$ 164 Billion Vaccine ”
    This is obviously DEAD WRONG !
    It is 164 billion Brazilian Currency….NOT US$

    The difference is only a factor of 2,4 LOWER !!!!!!

    But coming from the Disinformation & Propaganda Dept at the Planalto Palacio, next to Lula office, it us quite normal
    to voluntary MIX UP US$ and Brl….whenever it may please the Crooks Controlling the Country !

    Ohhhhh by the way….ROBBING HOOK…has given a nice Santa Claus Gift to All Brazilians :
    In November the average interests rate on all brazilian banks lending stood at 44,1 % up from 42,9 %.

    No doubt that is the reason why Robbing Hook is telling you….CONTINUE YOUR SPENDING !!!!!

    What a poisoned pill gift…from Santa Lula !!!!!!

    Viva Lula….Viva Lulaa…Viva Lulaaa !

    Dont worry… Robbing Hook is so nice he will make sure 20 % more overall loans will be provided in 2009, so that your own interests are going to be higher and higher…at least in the total amounts if not on the rates !

    😀 😉 😀 😉 😀 😀 😉

    here are the proofs of what is said above
    “State and non-state bank lending rose to 1.209 trillion reais ($509.4 billion) from 1.19 trillion reais in October, the central bank said in a statement distributed today in Brasilia. Lending climbed 33 percent from the same month last year.
    The average annual interest rate Brazilian banks charged customers rose to 44.1 percent from 42.9 percent in October, the report said.
    Next year, loans may increase 19 percent, the lowest rate since 2003, according to the survey, which was released last month.”

    In Brazil there is Nooooo Credit Crunch, Just Crunched Brazilians…in view of the interests rates you pay what you borrowed !

    😀 😉 😀 😉 😀 😉

  • bo


    No wonder this country has turned so rabidly anti-american. It really has had more to do with the Lula administration than with the Bush.

  • João da Silva


  • bo

    6th icon from the left and you have to enter the jpg code….that’s it.

  • João da Silva

    Hey Bo, how do you manage to insert the pictures in your comment? I tried to use that 6th icon from the left and insert a pic. Doesn’t work. Clue us all in please.

  • ch.c.

    Falupa ” Many countries are going to go Bankrupt from this recession”
    Yesss most of them will be in South America….just as in the past !
    Surprised ?
    The region has been historically the World Champions in number of bankruptcies !
    I am not necessarily talking about Brazil.
    Is Brazil, as written everywhere, BETTER prepared than in past cycles ? Yesss but but but…BETTER doesnt mean WELL prepared, JUST BETTER prepared ! Just think about it.

    In my humble view, it means that there is very little risk to have once more your currency taking out 3 zeroes, but more pronounced weakness than is already the case is certainly not out of the possibilities !

  • ch.c.

    Brazil Government has INJECTED NOTHING…in the economy !

    You just changed maths. That is not Government money injection like let say China is doing with their US$ 581 billion !

    China just lowered their rates for a fifth time in 3 months. All Countries in OCDE, and also India, New Zealand, Australia and nearly ALL Asian countries LOWERED their rates more than once. Brazil so far…..ZERO TIME !
    Despite you dont have a higher inflation rate than many emerging nations…..YOUR rates are still the World Highest…after inflation.
    If you believe you can afford heavy infrastructure development with such rates…YOU are dead wrong !
    Just look at your paved roads….totalling 5 %, a much lower rate than many poorer countries than Brazil.
    Even a lower rate than most African countries.

    And it is not by cutting your rates by 2 % or so next year that will change anything fundamentally.

    As I said in another comment : Brazilians are the World Champions in auto goals !

    And as usual, I challenge anyone to prove me wrong if they can !

    😀 😉 😀 😉 😀 😉 😀 😉 😀 😉

  • bo

    we don’t have no steenkin’ crisis??


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