In a statement, the Ministry of Finance informed thatthe measure aims to expand the ability of states and municipalities to obtain loans to finance projects and other authorized expenses, with or without the guarantee of the Union.
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How the measure works
The limits set by the CMN establish how state and municipal governments can contract within the applicable fiscal rules.
In practice, the expansion allows these entities to have more space to seek financing, provided they meet the legal and fiscal requirements for obtaining the loans.
There are two main modalities:
- Credit with Union guarantee: the federal government offers a guarantee to the lender in case the state or municipality does not fulfill the obligations of the loan. This guarantee can facilitate access to financing, but depends on meeting the required criteria;
- Credit without Union guarantee: the state or municipality itself assumes the obligation before the lender, without federal guarantee for the operation.
The resolution expands the available limits for both modalities.
New credit limits
The distribution of the additional R$ 2 billion is as follows:
- Operations with Union guarantee: increase from R$ 1.5 billion, from R$ 8.5 billion to R$ 10 billion.
- Operations without Union guarantee: increase from R$ 500 million, from R$ 6.5 billion to R$ 7 billion.
With this, the sublimits allocated to these operations total R$ 17 billion.
The remaining limits defined by the CMN remain unchanged.
Where do the resources come from?
The expansion was based on a survey by the Secretariat of the National Treasury with entities participating in fiscal monitoring and adjustment programs.
The study identified approximately R$ 7.87 billion in fiscal space without a perspective of utilization by the end of 2026. This space corresponds to the available margin within the established fiscal and credit limits.
Of this total, R$ 5 billion had previously been allocated through two resolutions of the CMN, one in August, which released R$ 3 billion, and one in September, which released R$ 2 billion.
An estimated fiscal space of R$ 2.87 billion remains.The new resolution allocates an additional R$ 2 billion of this amount to expanding credit limits for states, the Federal District, and municipalities.
According to the government, the change is due to the fact that the available limits for local government credit operations were virtually exhausted.
Other limits maintained
The resolution does not alter the values reserved for other credit modalities and public entities. The following limits remain:
- New PAC with Union guarantee: R$ 2.8 billion;
- New PAC without Union guarantee: R$ 2.2 billion;
- Brazilian Postal and Telegraph Company: R$ 8 billion;
- Union bodies and entities: R$ 625 million;
The New PAC is the Programa de Aceleração do Crescimento, a federal initiative that brings together investments in infrastructure and other areas.
What changes in practice
With the increase in the limit, states and municipalities will be able to count on a greater margin to contract financing in 2026. This may facilitate the acquisition of resources for public investments and projects, in accordance with the applicable rules for each operation.
However, this measure does not mean that the R$ 2 billion will be transferred directly to regional governments. The value corresponds to the increase in the authorized limit for credit operations. Each entity still needs to contract the financing and meet the legal, fiscal, and financial requirements.
The resolution comes into effect on the date of its publication.
Who makes up the CMN
The National Monetary Council is the body responsible for establishing guidelines for the country's monetary, credit, and exchange rate policies.
Presided over by the Minister of Finance, Dario Durigan, the council also includes the President of the Central Bank, Gabriel Galípolo, and the Minister of Planning and Budget, Bruno Moretti.