Brazil government freezes Rio state accounts

Brazil's federal government froze 170 million reais ($53.12 million) of Rio de Janeiro state's assets after it missed a series of debt payments, the state finance secretariat said on Monday. The asset freeze adds to the financial challenges facing the state and will further hinder its ability to pay public sector workers from police to teachers to doctors.
"Rio hopes to raise the money in the next three days and have its accounts unfrozen this week," a spokesperson at the state finance secretariat told Reuters. "That the state needs three days to raise the money shows the gravity of the (financial) situation," the person added. Rio's government is in the midst of an economic crisis as the oil-dependent state battles a collapse in revenue due to falling crude prices.
In an emailed statement, Brazil's Finance Ministry said Rio's assets had not been frozen but rather funds had automatically been transferred from the state to federal accounts to guarantee payment, as stipulated by law. The state of Rio was forced to declare a fiscal emergency weeks before the Olympics and needed last-minute financial support from the federal government to pay for security at the Games and complete a metro line to transport fans to the venues.