Government expands credit for companies affected by

Brazil Sovereign Plan expands access to credit for companies.

The Brazilian government announced this week the expansion of companies' access to the Sovereign Brazil Plan, a program that offers emergency credit lines to sectors impacted by tariffs imposed by the United States. The measure aims to preserve liquidity, sustain production, and protect jobs in the segments most affected by the so-called US "tariff hike.".

New rules and scope

Published on November 12th, Ordinance 21, signed by the Ministries of Finance and Development, Industry, Trade and Services (MDIC), expanded the criteria for companies to apply for financing. Now, in addition to directly affected exporters, suppliers of these companies can also access the resources, provided that the impact of the tariffs represents at least 1% of gross revenue.

The National Monetary Council (CMN) regulated the changes in an extraordinary meeting on November 13, making the expansion of the program effective. The CMN is chaired by the Minister of Finance, Fernando Haddad, and includes the participation of the President of the Central Bank, Gabriel Galípolo, and the Minister of Planning, Simone Tebet.

Volume and context of negotiations

The Sovereign Brazil Plan makes available R$30 billion in credit lines operated by BNDES. The initiative was created in August based on Provisional Measure 1,309 to mitigate the effects of the US tariff increase on the Brazilian productive sector.

Meanwhile, the government is maintaining diplomatic negotiations to try to reduce tariffs. On November 12, Foreign Minister Mauro Vieira met with US Secretary of State Marco Rubio during the G7 summit in Canada to discuss the progress of bilateral talks. Brazil sent a formal negotiation proposal in early November.

Impacts and official statements

Vice President and Minister of Industry, Foreign Trade and Services (MDIC), Geraldo Alckmin, highlighted that the government is working on two fronts: diplomacy and direct support to the productive sector. "While negotiating with the US, the government of President Luiz Inácio Lula da Silva remains attentive to the needs of the productive sector," he stated.

Alckmin emphasized that expanding the revenue criteria and including suppliers broadens the program's reach, benefiting a larger segment of the Brazilian economy.

Brazilian market context

In the financial scenario, the Ibovespa registered a slight drop of 0.07% on November 13th, interrupting a sequence of more than 10 consecutive days of gains. Among the stocks that appreciated the most, Taísa (+5.77%), CSN (+5.05%) and B3 (+4.36%) stand out, the latter also holding a teleconference with analysts explaining its results.

Banco do Brasil released results showing a 60% drop in annual profit, impacted by increased default rates and provisions, reinforcing the challenging environment for the financial and productive sectors.

Photo by Gabriel Tiveron on Unsplash