Banco dos Brics says it had a liquidity crisis in 2022 – 08/21/2023 – Panel

The New Development Bank (NDB), the official name of the Banco dos Brics, says that a “liquidity crisis” that has occurred in recent years has resulted in a reduction in the volume of projects it finances.

The institution, commanded since March this year by former president Dilma Rousseff, is the official financing body of the Brics, a group that brings together Brazil, Russia, India, China and South Africa.

Its leaders, including President Luiz Inácio Lula da Silva (PT), will participate in a summit meeting in South Africa, which starts this Tuesday (23).

“The NDB did not issue dollar bonds for 15 months from December 2021 to March 2023. Yuan bonds [moeda chinesa] were also not issued for seven months. The “panda bond” program, in yuan, had expired when, in March 2023, the new president [Dilma] assumed,” the bank said in a note to the Panel.

The administration prior to that of Dilma was commanded by Marcos Troyjo, linked to former Minister of Economy Paulo Guedes. He left office earlier this year, before the end of his term, due to pressure from the Lula government. Contacted by the Panel, he declined to comment.

The bank is dedicated to financing projects in member countries, in areas such as housing, urban transport and sanitation.

As the NDB website shows, there were only eight new projects so far in 2023, an average of just over one per month. The bank claims that the reduction in the pace this year refers to the problems of the past, since each project has a maturation period of six to ten months.

In 2021, 18 projects were approved (1.5 per month). In 2019 and 2021, there were 21 projects each (1.75 per month).

The NDB foresees the approval of at least 12 new financing projects by the end of this year. The bank claims to have “overcome the liquidity constraint” and raised $3.9 billion between March and July.

“NDB is now a well-capitalized bank with low leverage, which quickly restarted project selection and approval. “With five months to the end of 2023, the current outlook is positive, which will be reflected in the number of projects approved in 2024”.

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