The Brazilian government said on Monday that the National Monetary Committee had approved a credit line of 4 billion reais (1.78 billion U.S. dollars) for the country's 26 states and the Federal District.

According to the government, the credit line aims at helping the states make necessary investments in the face of the global financial crisis. The Brazilian Development Bank (BNDES) will be responsible for granting the loans.

The loans have a maturity of eight years with a grace period of one year. The BNDES has yet to disclose further details on the structures of the loans.

The maximum value of the loans will correspond to the maximum value of the States' Participation Fund for each state. The states in northeastern region, the poorest in the country, will receive more money than most states in the developed southern and southeastern region.

The northeastern Bahia State will be granted the highest credit line of 375.8 million reais (167.7 million dollars), while the lowest one of 27.6 million reais (12.3 million dollars) will be granted to the Federal District, where the country's capital Brasilia is located.