Brazil lowers agricultural loan rates and weighs caps on FGTS‑backed credit

The Brazilian government negotiated a reduction of up to 1.5 percentage points in the interest rates of the controlled lines of the Plano Safra 2026/27 for agribusiness, a move announced by interim President Geraldo Alckmin and Agriculture Minister André de Paula. The cut falls short of the ministry’s request for single‑digit rates but reflects fiscal constraints, a Selic rate of 14.25% and limited budget room for interest equalisation.

Separately, legislators and banking groups are debating a maximum interest‑rate ceiling for private payroll‑backed loans that use FGTS balances as collateral. The proposal seeks to curb high borrowing costs for salaried workers while preserving banks’ incentive to lend, though a low cap could shrink the supply of such loans for higher‑risk borrowers.