Brazil expected to inject US$12bn into credit via public banks

Brazil's government is expected to announce an injection of 50bn reais (US$12.3bn) into lines of credit offered by federally owned Banco do Brasil, Caixa Econômica Federal and BNDES in an attempt to stimulate investment and economic growth, reported Estadão.

The announcement will be made on Thursday by finance minister Nelson Barbosa at a meeting to reopen the Council for Economic and Social Development, also known as the Conselhão.

The government will also announce the expansion of credit from development bank BNDES to finance the production of goods and services for export, the report said.

President Dilma Rousseff has said she wants foreign trade to be one of the paths Brazil takes to revive its economy.

The Conselhão meeting is seen as an important milestone that signals the government's main commitments and its economic recovery strategy.

Credit is the cornerstone of the policy expected to be adopted. According to Estadão, Brazil's economic team believes there is demand for loans, despite skepticism from the financial markets.

Details of the lines of credit, which will have below-market rates, are still being decided upon by the finance ministry.