On Tuesday, the Minister of Economy in Brazil, Paulo Guedes commented about a number of matters while attending an online event. According to his statement, the country is set to join hands with the Organization for Economic Cooperation and Development, also known as OECD. In addition, Guedes also revealed that the Brazilian government had plans of launching an Initial Public Offering (IPO) of shares for the newly founded digital bank by the Caixa Econômica Federal. They established their digital bank in the midst of the global coronavirus pandemic and the purpose of establishing it was to help the government of Brazil in sending out financial aid to nearly 64 million Brazilian citizens.
Guedes made these comments while attending the Milken Institute Global Conference. During the conference, he also added that the central bank was working hard to attract new investors in the country as well. Hence, one of the biggest bets they had made in this regard was to introduce the recently-established digital bank. Caixa Econômica Federal established this bank, which is fully state-owned. Guedes said that this was part of their strategy to boost privatization in the country. Some heavy expenditures were made by the government of Brazil in order to try and battle the economic ramifications of the global coronavirus pandemic.
COVID-19 has wreaked its havoc on economies all over the world and Brazil has been one of the countries with a record number of cases. Consequently, one of the biggest measures that the government had introduced was organizing emergency payments for the citizens who had low income. Caixa proved to be a very prominent figure in this process because they worked on identifying the ones who should be beneficiaries of these measures and then paid them accordingly. When speaking at the conference, Guedes assured the audience that the initiative had led to a digital bank that had total users of 64 million.
This has helped open up a lot of market opportunities for them. It was reported by Reuters that Guedes had also indicated that Caixa’s customer base had made it easy to develop plans for this digital bank in order to host an IPO. Established within a matter of six months, this bank can generate a lot of benefits for the government through its IPO. Guedes highlighted that currently, the bank is catering to almost 64 million customers, even if they are of low-income households. He tried to use this fact for drumming up some positive sentiments and also asked people how much it should be valued at.
He also disclosed that the digital bank users had been unbanked previously and assured that they would remain loyal to in for the foreseeable future. A Brazilian website by the name of InfoMoney reported that Guedes had also reassured everyone that the Central Bank would work on actively reducing the risks for foreign investors. However, he did add that doing so would certainly come with a price tag and was ready to accept any form of payment for this purpose.