Thursday, December 8

Brazil’s public debt drops for third straight month in September

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BRASILIA — Brazil’s federal public debt fell for the third consecutive month in September, official data showed on Wednesday, with the net redemption of bonds again reducing the government’s liquidity reserve.

According to the Treasury, bond redemptions exceeded issuances by 76.4 billion reais ($14.29 billion). At the same time, interest payments on public debt reached 47.2 billion reais.

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As a result, the stock of federal public debt fell by 29.4 billion reais over August to 5.752 trillion reais.

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The Treasury’s liquidity reserve, which allows it to have greater freedom in debt management amid market volatility, fell 10% from the month before to 1.031 trillion reais, lowest level since Oct 2021.

The Treasury said the volume is sufficient to ensure payments of 9.55 months in bond maturities ahead.

Given the recent inflationary relief in Brazil, the yield on inflation-linked bonds decreased, leading the average interest rate on the issuance of domestic federal debt to fall to 11.7% in September from 11.9% in August.

Brazil’s consumer prices were in deflationary territory for the third month in a row in September, benefiting from major tax cuts on fuels and electricity ahead of a presidential election runoff on Oct. 30. ($1 = 5.3458 reais) (Reporting by Marcela Ayres Editing by Chris Reese and Sandra Maler)