May 10th, 2024


1. Floods in Rio Grande do Sul: federal government announces emergency support and credit for families, companies, and farmers

On Thursday (May 9), Finance Minister Fernando Haddad announced that the federal government is creating credit measures to help families, companies, and small farmers who have been affected by the flooding in Rio Grande do Sul. Nearly 80% of the municipalities in the state are affected, with 336 cities in a state of calamity. The state of Rio Grande do Sul faces what is considered the worst environmental disaster in its history.

The aid plan includes a broad credit line for families in a state of calamity. There are no specific details about the goods that can be acquired with the credit. Furthermore, the government is considering suspending the payment of debts from Rio Grande do Sul with a bill aiming to offer differential treatment in a situation of climate crisis.

Despite the efforts with specific policies, the extent of damages and the need for federal assistance are uncertain. The rain in the region continues, which affects the assessment of damages and complicates access to reliable information. The federal government is facing a challenge in identifying needs, but is prioritizing rescuing the people affected by the floods.

O Globo: Chuvas no RS: governo anuncia hoje crédito para família, empresas e pequenos agricultores
Folha de S. Paulo: Tragédia em andamento deixa incógnita sobre tamanho da ajuda federal ao RS

2. COPOM reduces Selic rate to 10.5% per annum

On Wednesday, the Central Bank’s Monetary Policy Committee (COPOM) decided to reduce the Selic rate by 0.25 percentage points to 10.5% per annum. This is the seventh consecutive cut to the basic interest rate since August 2023, when it was at 13.75% per annum.

The decision indicates a change in the rate of cuts. Up until now, the Committee had been making 0.5 percentage point cuts per meeting. Even with a less significant drop, the Selic rate is at the lowest level since February 2022, when it was 9.25% per annum. Economists already expected the drop due to proposals to change the fiscal goals and the delay in interest rate reductions in the United States.

In a statement after the last meeting, COPOM highlighted the need to keep calm when making monetary policy decisions, saying future adjustments in interest rates will be determined by the commitment to connect the inflation rate with the fiscal goal. Faced with a challenging global economic situation and expectations for inflation, the committee emphasized the importance of a cautious approach, maintaining contractionary monetary policy until the disinflation process and targets are more solid. The decision, however, was not unanimous among COPOM members.

G1: Copom reduz Selic para 10,50% ao ano; corte foi de 0,25 ponto percentual e em ritmo menor do que nas últimas reuniões
O Globo: Entenda em 5 pontos os principais recados do Banco Central ao cortar os juros para 10,50%

3. According to research, Brazilian fintechs have 251 million clients

Brazilian fintechs are on the rise, working with a total of 251 million individual clients at the end of 2023, a 77% increase in comparison to the previous year. The information was published in research by Zetta, which also revealed fintechs work with 7 million companies, including individual micro companies.

Fintechs cover a wide range of activities. Most of them are focused on other companies (B2B) and consumers (B2C). A significant portion of them mediate relations between parties (P2P) and work with the government (B2G).

When it comes to services offered, most companies deal with payment services (91% of fintech companies), followed by loans (66%), transactions (66%), open banking (58%), and anticipation of receivables (50%). Fintechs are also generating an economic impact, employing 17,300 people and implementing 64 initiatives aimed at information security and fraud prevention.

Valor: Fintechs brasileiras já têm 251 milhões de clientes, diz Zetta

4. São Paulo hosts climate investment week to encourage low-carbon businesses

At the end of May São Paulo will be the center of attention, with two events during Brazil Climate Investment Week that will bring together national and international investors interested in businesses focused on the climate crisis. The goal is to encourage discussions among investors and provide understanding about the opportunities in Brazil to generate growth, development, and jobs through the transition to a low carbon economy, aiming at both internal and external markets.

According to organizers, Brazil is faced with a unique opportunity as the president of G20 this year and president of BRICS and COP in 2025. Experts see a favorable political environment towards green development, with initiatives such as a regulated carbon market and green taxonomy. This situation generates a window of opportunity for the private market to invest in climate solutions.

The investment week begins on May 21st with Converge Capital, focused on the local financial market, and continues on the next day with NBS Investment Summit, aimed mostly at foreign investors.

Capital Reset: São Paulo será palco de semana de investimentos climáticos

5. Trade balance records a US$9 billion surplus in April

In April, the Brazilian trade balance registered a US$9.041 billion surplus, the Ministry of Development, Industry, Trade, and Services has announced. This positive balance is due to exports overcoming imports, in contrast with a deficit.

Compared to the same period of 2023, this month’s surplus was over the US$8 billion registered in April 2023. Exports in April reached US$30.92 billion while imports amounted to US$21.879 billion. Among highlighted exports are oil and fuel, with a 125.9% increase, followed by sugar and molasses with a 110.9% increase, crude oil with a 92.4% increase, and beef with a 79.4% increase.

In the accumulated results for the year, exports amounted to US$108.85 billion and imports to US$81.11 billion, resulting in a surplus of US$27.736 billion so far. 

G1: Balança comercial tem superávit de US$ 9 bilhões em abril