Good morning! The changes with Brazil’s money laundering enforcement agency. New rules for housing loans demand a leap of faith in Brazil’s macroeconomic scenario. The “black box” of the National Development Bank, BNDES. The meltdown of Oi Telecom. President Bolsonaro could drop his son’s nomination to the position of ambassador to Washington DC.
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How much can you trust Brazil?
Caixa, Brazil’s biggest state-owned bank, announced new rules for housing loans in Brazil. The government says the new type of loans (which are optional) would replace the currently-used French amortization system (with rates up to 9.75% per year) for interest rates based on inflation, which could vary between 2.95 to 4.95%.
Why it matters. While the new system will make more expensive properties accessible to middle-class families (which could stimulate the construction sector), experts warn that it could be detrimental to buyers. That’s because if inflation rises, interest rates would balloon. Real estate loans in Brazil last for periods of up to 30 years, in general, which demands a huge leap of faith in the local economy.
Slow recovery. The construction sector is one of the thermometers of Brazil’s economic activity,...