Brazil CMN raises subnational credit limit by R$2bn, easing fiscal constraints

Brazil's National Monetary Council approved a R$2 billion increase in the annual credit limit for states and municipalities, raising the Union-guaranteed sublimit from R$7bn to R$8.5bn. This is a modest fiscal loosening that allows subnational entities to borrow more, potentially supporting local spending but adding to sovereign contingent liabilities. The move signals continued policy support for subnational finances amid fiscal consolidation efforts.