US Markets

Brazil considers allowing early withdrawal from pensions

Brazilian Treasury Secretary Roberto Funchal said on Friday that the government is analyzing the possibility of allowing Brazilians to withdraw money from their pension funds early, as an emergency measure amid the coronavirus crisis.

By Marcela Ayres

BRASILIA, July 17 (Reuters) - Brazilian Treasury Secretary Roberto Funchal said on Friday that the government is analyzing the possibility of allowing Brazilians to withdraw money from their pension funds early, as an emergency measure amid the coronavirus crisis.

The measure has been allowed in Peru and is currently being discussed in Chile.

"People know it has benefits, but it can come with some costs," Funchal said, without offering further details, in a live online broadcast.

Funchal fielded questions about whether allowing the withdrawals could harm Brazilian Treasury bonds, which pension funds invest in. He did not give a clear answer, saying the economy ministry was still debating the measure.

Similar concerns were raised in Peru when the withdrawals were proposed there in March, and ultimately the central bank offered liquidity to the pension funds so that they would not sell Peruvian government bonds in order to fund the withdrawals.

As the coronavirus crisis continues, Brazil and other nations are debating whether to extend emergency financial support to citizens.

Funchal cautioned that the government was committed to not increasing overall public spending this year, meaning that any coronavirus support would need to be balanced out.

He predicted that Brazil's gross debt to GDP ratio would reach 98% at the end of the year.

(Reporting by Marcela Ayres; writing by Marcelo Rochabrun Editing by Chris Reese and Alistair Bell)

((marcelo.rochabrun@thomsonreuters.com; +55 11 5644 7768;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Latest Markets Videos

    Reuters

    Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

    Learn More