off-the-wire

UPDATE 1-Brazil's public debt drops sharply in January amid Treasury decision to hold off issues

Kitco Media
By Reuters
Published:
Updated:
Reuters
(Adds details, context) BRASILIA, Feb 28 (Reuters) - Brazil's federal public debt fell 3.07% in January from the month before on strong net redemptions, as the government refrained from issuing larger bond volumes amid rising costs, the Treasury said on Tuesday. Public debt fell to 5.769 trillion reais ($1.1 trillion), affected by net redemptions of 230.7 billion reais and by interest payments on public debt that reached 48 billion reais, said the Treasury.


The average interest rate on the issue of domestic federal debt rose to 12.23% in January from 12.08% in December, to the highest level since April 2017. Treasury Secretary Rogerio Ceron told Reuters earlier this month that the government was holding off issuing debt due to the pricing that potential investors were seeking.


Brazil's yield curve steepened as President Luiz Inacio Lula da Silva criticized the central bank for keeping its benchmark interest rate at a six-year high of 13.75%. The Treasury's liquidity reserve, which allows the government to have flexibility in debt management amid market volatility, fell 18.9% in January from December, to 953.4 billion reais. In a statement, the Treasury said the volume still "guarantees payment for the next 7.62 months ahead of maturities, therefore well above the 3 months of maturities taken as the prudential limit for debt management." ($1 = 5.2201 reais)
(Reporting by Marcela Ayres; Editing by Aurora Ellis)

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