(Recast and adds context)
BRASILIA Dec 23 Brazil's state development bank
BNDES repaid early some 100 billion reais ($30.6 billion) to the
national treasury, the Finance Ministry said on Friday, thus
lowering the country's public debt.
The payment, comprised of 40 billion reais in securities and
60 billion reais in cash, will be used to service debt that the
ministry expects will be reduced by 1.6 percentage points of the
country's gross domestic product (GDP).
Over the last ten years Brazil's gross debt has skyrocketed
to 70 percent of GDP as the government raised spending and
subsidized lending through the BNDES, the country's main
provider of long-term corporate credit.
President Michel Temer has vowed to limit public spending
and cut pension benefits to reverse the surging trend of the
debt that cost Brazil its investment-grade rating last year.
The early payment is the equivalent to nearly 19 percent of
the debt the BNDES holds with the treasury.
In recent years, the treasury has lent dozens of billions of
dollars to the BNDES to finance Brazilian companies at home and
($1 = 3.2695 reais)
(Reporting by Patricia Duarte; Writing by Tatiana Bautzer and
Alonso Soto; editing by Diane Craft)