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Lula da Silva signs bill creating sovereign wealth fund

Friday, December 26th 2008 - 20:00 UTC
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Brazilian President Lula da Silva has signed a law creating a sovereign wealth fund to protect the country from the global financial crisis and help Brazilian companies boost trade and expand overseas.

The presidential press office said in a statement that Lula da Silva signed the law on Wednesday and also inked a provisional measure endowing the fund with the equivalent of nearly 6 billion US dollars. The statement provided no details, however the provisional measure must still be submitted to Congress for its approval. Earlier this year, Finance Minister Guido Mantega said money for the fund would come from the federal government's primary budget surplus expected to come in at 3.8% of gross domestic product, GDP. Congress took a vote last week on the initiative but the opposition blocked the approval of the bill to provide money for the fund. The ruling party (PT) chairman Ricardo Berzoni criticized on Wednesday the opposition's attitude "There was a lack of seriousness (from the opposition). Now, the government was obliged to worked out a Provisional Measure bill to ensure the resources (of the fund)," said Berzoini. Last Tuesday, Treasury Secretary Arno Augustin said the government would not use the fund's money to manage foreign exchange rates of the Brazilian currency, Real.

Categories: Economy, Brazil.

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