Brazil has offered its state governments 50 billion reais ($A20.13 billion) of emergency debt relief over the next three years in an effort to shore up public services and extended an emergency loan to Rio de Janeiro before the Olympics.
Finance Minister Henrique Meirelles announced after a meeting among state governors and interim President Michel Temer that states would receive a six-month grace period on debt to the federal government, followed by a year and a half of reduced payments.
The federal government also agreed to extend a 3 billion-real loan to the state of Rio de Janeiro, a source with knowledge of the situation said. The funds will be paid next week, the source said, adding that details on making the transaction were still being decided. Rio originally asked for a loan of 6 billion reais, the source said.
Rio declared a state of financial emergency on Friday and requested funds to pay for public services during the Games and the completion of a subway line needed to carry fans to Olympic venues.
Meirelles said governors agreed at the meeting with Temer on the need for separate treatment for Rio because of the Olympics and they would not follow suit in declaring a financial emergency.
