Brazil’s Lula to analyze spending cuts of up to $2.6 billion, says local media

SAO PAULO (Reuters) – Brazil’s President Luiz Inacio Lula da Silva will analyze two fiscal packages with spending cut measures that would amount up to 15 billion reais ($2.6 billion), CNN Brasil reported on Thursday.

Lula will analyse two packages, one amounting to about 10 billion reais and another of around 15 billion reais, according to the report, which mentioned sources from the government’s economic team.

The Brazilian real weakened further against the U.S. dollar after the CNN Brasil report, while some short-term future interest rates reached the session high, and Brazil’s equities benchmark Bovespa reversed earlier gains.

Analysts have told Reuters that an amount around 30 billion to 50 billion reais would be required to ease the country’s fiscal concerns, although the amount diverges among market participants.

($1 = 5.7125 reais)