New emergency aid package under consideration in Brazil

Brazil is preparing a fresh round of emergency cash transfers to millions of poor and vulnerable people, President Jair Bolsonaro said on Monday, adding that any package will also take into account investor concerns over the government's fragile finances. "We are not going to run away from the issue of emergency aid. A large part of the population is in difficulty," Bolsonaro said, warning that further fiscal stimulus must be done in a responsible manner. "I think there will be an extension," Bolsonaro said in an interview with the TV program Brasil Urgente. If not, financial markets could be spooked and the real could weaken to as low as 6 per dollar, Bolsonaro warned.

Earlier on Monday, a government source said the proposal is for three monthly installments of 200 reais ($37) aimed at millions of informal workers not already signed up for the "Bolsa Familia" benefit scheme, at a cost of around 6 billion reais ($1.1 bln) a month. The government's constitutional spending ceiling limits the growth in public spending to the previous year's rate of inflation. Economy Minister Paulo Guedes insists it is the government's fiscal "super anchor" and must not be breached. Last year's emergency spending was approved under a "state of calamity" budget and was not subject to the usual budget rules, which meant the cap was not officially broken.