The long-term price may vary by sector, says BNDES director
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Jose Gordon talks about creating a “bundle of prices” in order to “strengthen the productive sector” and “put an end to the volatility of TLP”
Director of Productive Development, Foreign Trade and Innovation at BNDES (National Bank for Economic and Social Development), Jose Gordon, said that the state development bank does not intend to terminate TLP (Long Term Rate) or recreate the TJLP (Long Term Rate).
“What is being considered is that there is a set of rates, just as public debt has many interest indices, which can also index BNDES loans, as far as possible, and adhere to the limits of public debt and Selic.Gordon said in an interview with the newspaper the world Posted on Wednesday (March 29, 2020).
Adoption of TLP to replace TJLP (Long Term Interest Rate) in Govt Michel Tamer (MDB) helped anchor inflation and a poor outlook. It also allowed the growth of private credit and lowered the neutral rate of interest.
Before, the TJLP allowed loans at much lower interest rates than Selic and required resources from the national treasury to finance operations. In other words, they were supported.
The TLP sought to adjust the BNDES credit interest rates to those practiced by the market. according to State Development Bank, the TPL for contracts signed from March of that year is calculated on the basis of the IPCA (National Extended Consumer Price Index).
According to Gordon, the idea of price lovers is “Pushing the productive sector to be innovative” that it “Ending TLP volatility, which varies from month to month and that hurts cash“.
For him, the current account, which is indexed to the IPCA, makes the rate unstable. “It’s inflation of the month. Therefore, it is very unstable and volatile. In one month it is one value, in another month it is another. For an entrepreneur’s cash flow, that’s awfulhe declared.
“Today, TLP has become a cost for exporters. The world has returned to discussing industrial policy, which is beginning to be based on innovation and decarbonization. BNDES will support the structuring of more complex technology parks and startups“, He said.
“Markets will start not wanting products that are not green, carbon-free or innovative. Even to export, you need to have a strong industry. That’s why we need to do this whole process.“
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