August 16, 2010

Brazil to finance beef exports to Iran

A Brazilian state-controlled bank, Caixa Economica Federal, will finance up to €1 billion ($1.3 billion) in beef shipments to Iran after private banks refused to extend credit to exporters.

According to reports, private banks did not extend beef exporters' credit fearing retaliation from the US and EU.

Brazil's Caixa Economica Federal, one of the largest government-owned financial institutions in Latin America, said the financing will be backed by Brazil's Treasury, which will collect payment from the Iranian government.

Sanctions imposed by the UN Security Council, US and EU have led Brazilian banks to reject credit guarantees issued by Iranian banks, according to reports.

Brazilian President Luiz Inacio Lula da Silva, in a visit to Tehran in May, signed an agreement to finance food exports to Iran, as well as to boost investment and expand air connections between the two countries.