Brazil changes law to allow QE amid chaotic response to virus

The Central Bank of Brazil

Brazilian lawmakers changed the country’s constitution on May 7 to allow the central bank to carry out monetary financing operations, including directly buying government debt.

Before the vote, the Central Bank of Brazil could buy government debt on secondary markets, but was forbidden from carrying out direct purchases. The vote by Brazil’s congress will also allow the CBB to directly purchase corporate bonds.

The move came a day after the CBB cut its main policy rate by 75 basis points to 3%

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