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UPDATE 1-Brazil's BNDES repays $30 billion to Treasury
December 23, 2016 / 8:23 PM / in 10 months

UPDATE 1-Brazil's BNDES repays $30 billion to Treasury

(Recast and adds context)

BRASILIA, Dec 23 (Reuters) - Brazil’s state development bank BNDES repaid early some 100 billion reais ($30.6 billion) to the national treasury, the Finance Ministry said on Friday, thus lowering the country’s public debt.

The payment, comprised of 40 billion reais in securities and 60 billion reais in cash, will be used to service debt that the ministry expects will be reduced by 1.6 percentage points of the country’s gross domestic product (GDP).

Over the last ten years Brazil’s gross debt has skyrocketed to 70 percent of GDP as the government raised spending and subsidized lending through the BNDES, the country’s main provider of long-term corporate credit.

President Michel Temer has vowed to limit public spending and cut pension benefits to reverse the surging trend of the debt that cost Brazil its investment-grade rating last year.

The early payment is the equivalent to nearly 19 percent of the debt the BNDES holds with the treasury.

In recent years, the treasury has lent dozens of billions of dollars to the BNDES to finance Brazilian companies at home and abroad.

$1 = 3.2695 reais Reporting by Patricia Duarte; Writing by Tatiana Bautzer and Alonso Soto; editing by Diane Craft

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