By Rogerio Jelmayer

SAO PAULO--Brazil maintained unchanged the long-term interest rate used to calculate loans to businesses made by the government-controlled Brazilian Development Bank, or BNDES.

Brazil's National Monetary Council decided late Wednesday to keep the so-called TJLP at 7.5%. The rate will remain in effect during the first quarter of 2017.

The longer-term rate is well below the country's base rate, the Selic, which is at 13.75% a year.

With the holding steady of the TJLP, the government seeks to provide more-competitive loans to businesses, trying to fuel the country's sagging economy. After contracting by 3.8% last year, Brazil's economy is expected to shrink 3.5% this year, according to finance ministry.

The National Monetary Council, Brazil's highest economic-policy-making body, includes the finance and planning ministers and the central bank president. The rate is reviewed on a quarterly basis.

Write to Rogerio Jelmayer at rogerio.jelmayer@wsj.com

(END) Dow Jones Newswires

December 22, 2016 05:18 ET (10:18 GMT)

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