Brazil forgives R$12.6B in unrecoverable debts; Finance says no budget impact

Brazil's Lula administration announced forgiveness of R$12.6 billion in debts, which the Finance Ministry classifies as largely unrecoverable, thus claiming no fiscal impact. The move is part of broader debt-relief efforts, but the actual budget neutrality is uncertain given the scale. This signals continued fiscal leniency, which may affect market perceptions of Brazil's fiscal discipline.