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By Marcela Ayres
BRASILIA, Oct 26 (Reuters) - Brazilian development bank BNDES has agreed to repay an additional 17 billion reais ($5.3 billion) to the National Treasury in a boost to policymaker efforts to curb public debt.
BNDES had agreed in September to settle 33 billion reais worth of debt with the federal government this year, following a similar 100 billion repayment in 2016. Reuters reported last month that BNDES was mulling an additional 17 billion real early settlement.
The move should provide some breathing room for officials struggling to meet budget rules. But it does little to assuage the government’s fiscal challenges for 2018, as it struggles to pass tax hikes ahead of next year’s elections.
A person at the development bank told Reuters in September that the government was pushing for a 130 billion real repayment next year. BNDES executives, however, considered that amount excessive, saying it would dampen its ability to provide credit as Latin America’s largest economy resumed growth following a deep recession, the person said.
According to a Thursday statement, the board of BNDES will discuss whether to conduct further repayments in 2018. The 50 billion-real settlement scheduled for this year will not affect BNDES’ capital structure, the statement said.
$1 = 3.23 reais Reporting by Marcela Ayres; Writing by Bruno Federowski; Editing by Chizu Nomiyama and Bernadette Baum