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4 months ago
Brazil workers may withdraw $11 billion from severance fund - Caixa
April 5, 2017 / 2:52 PM / 4 months ago

Brazil workers may withdraw $11 billion from severance fund - Caixa

2 Min Read

BRASILIA, April 5 (Reuters) - State-controlled lender Caixa Econômica Federal expects Brazilian workers to withdraw a total of 35 billion reais ($11.3 billion) from a severance fund by the end of July, as part of government efforts to stimulate the economy amid frail signs of a recovery.

In December, President Michel Temer's administration announced it would allow Brazilians to extract all money from so-called FGTS accounts that were inactive for over three years.

Under previous law, those funds could only be accessed if a worker was fired, retired or needed money to acquire property.

Handing out extra cash to consumers could boost spending as Latin America's largest economy slowly stabilizes from its deepest recession on record. Households have yet to benefit from the early recovery following years of rampant debt-fueled consumption.

Speaking at an event in Brasília, Caixa Chief Executive Gilberto Occhi said the bank will bring forward the start of the second phase of withdrawals, which encompasses workers born in the months of March, April and May, to Saturday from Monday, in response to heavy demand.

In the first phase of withdrawals in March, Brazilians born in the months of January and February withdrew a total of 5.9 billion reais.

According to Caixa's press office, up to 11.2 billion reais are available for withdrawal in April, or 26 percent of total funds.

$1 = 3.0897 reais Reporting by Marcela Ayres; Writing by Bruno Federowski; Editing by Alden Bentley

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