BRASILIA - BRAZIL is to inject $42.5 billion (S$63.6 billion) into its state development bank to boost private sector investment this year, Economy Minister Guido Mantega said on Thursday.

The money - 100 billion reais - for the Brazilian Development Bank is to be raised from a government debt issue with a yield lower than the central bank's reference interest rate, which was cut by one percentage point on Wednesday to 12.75 per cent, he said.

It will more than double the bank's funds to 166 billion reais, he said.

'The aim is to make credit available for the main economic activities, for investments which will create employment,' Mr Mantega said.

The money will be made available to companies pledging to maintain employment, according to the minister.

Brazil has in recent weeks multiplied efforts to counter the effects of the global economic and financial crisis, which threaten to result in mass job losses as industry output and consumer spending plummet in Latin America's biggest economy. -- AFP