Brazil’s government cut the maturity of foreign loans that are subject to the so-called IOF tax.
The 6 percent tax, which previously applied to foreign loans with maturities of up to one year, will now only be charged on loans and bonds with durations of up to six months, according to a presidential decree published today in the official gazette. The last time the government changed rules for such operations was in December 2012.
The Finance Ministry says the measure is intended to help companies with short-term credit. The decision comes a day after the Brazilian real fell to its lowest close since March 26 on speculation the central bank is unlikely to provide sustained support for the currency.
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