Coronavirus measures - an update

BRAZIL POLITICS - Report 16 Mar 2020 by Murillo de Aragão and Cristiano Noronha

President Jair Bolsonaro continues to fuel controversy with the Speakers of the House and the Senate over budgeting issues. In a radio interview on March 16, he said that he welcomes with open arms an understanding with the leaders of the Congress about the matter. Meanwhile, the government is discussing the adoption of new measures. Some have already been taking place today, such as measures referring to debt and credit, and measures announced by the National Monetary Commission. The release of a bill to support the electrical sector is also expected today. In addition, the Lower House announced full support for all the measures related to the coronavirus.

These are the economic measures that have been announced by the government so far:

* The National Monetary Commission approved two measures that facilitate the renegotiation of debts by companies and individuals and ease the granting of credit by banks. The first exempts banks from increasing provisioning in the case of renegotiation of credit operations to be carried out in the next six months, and the second increases the banks´ capacity to use capital so that they are better able to carry out any debt renegotiations. According to the Central Bank, the shares will increase the credit-granting capacity by around R$ 637 billion.
* According to the Brazilian Federation of Banks (Fenabran), the five largest banks in the country (Banco do Brasil, Itaú, Bradesco, Santander and Caixa) are open and committed to meeting requests for a 60-day extension of customer debt for current contracts and limited to the values already used.
* The government is set to propose to Congress the expansion of the benefit margin that can be committed to payroll deductions, today at 30% for loans and 5% for credit cards.
* The government is also studying the expansion of resources for Bolsa Família and is evaluating suspending payments of the contribution on payrolls to prevent companies from starting to fire employees.
* A bill from the Presidency is due to be announced allowing airlines to postpone the payment of federal taxes such as PIS and Cofins for the next three months.

The Central Bank said that is continuously monitoring Brazil´s financial system and economic activity, and that it will not hesitate to use its entire arsenal to ensure financial stability and the smooth functioning of markets.

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