UPDATE 1-Brazil’s public debt drops for the third consecutive month in September
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BRASILIA, Oct 26 (Reuters) – Brazil’s federal government debt fell for the third straight month in September, official data showed on Wednesday, as net bond redemptions further reduced the government’s cash buffer.
According to the Treasury, bond redemptions exceeded issuances by 76.4 billion reais ($14.29 billion). At the same time, interest payments on the public debt reached 47.2 billion reais.
As a result, the outstanding federal public debt decreased by 29.4 billion reais during the month of August to stand at 5,752 billion reais.
The Treasury’s liquidity reserve, which allows it to have greater freedom in debt management in a context of market volatility, fell 10% from the previous month to reach 1,031 billion reais, its lowest level since October 2021.
The Treasury said the volume is sufficient to service the 9.55 month payments on upcoming bond maturities.
Given the recent easing of inflation in Brazil, the yield on inflation-linked bonds has declined, causing the average interest rate on domestic federal debt issuance to drop to 11.7% in September, against 11.9% in August.
Brazil’s consumer prices were in deflationary territory for the third straight month in September, benefiting from deep fuel and electricity tax cuts ahead of the October 30 presidential run-off. ($1 = 5.3458 reais) (Report by Marcela Ayres edited by Chris Reese and Sandra Maler)