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| Brazilian dreamcatchers |
Imagine what would happen in a country whose state development bank – which accounts for around 50% of corporate credit – decides suddenly and substantially to cut the level of its funding to the private sector.
And, at the same time, its government also changes the interest rates that the development bank charges from a subsidized rate far below the country’s base rate to one that is very close to that base rate (and therefore much closer to lending terms available from private-sector banks).
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