Brazil federal public debt up 1.61% in May to $1.046 trillion
After a sharp plunge in April, Brazil’s federal public debt took an upwards turn again in May. As per figures released Monday (Jun. 28) by the National Treasury, the federal public debt went from $1.029 trillion in April to $1.046 trillion in May, up 1.61 percent.
The Treasury estimates that the public debt—combining both internal and external debts—will continue on the rise in the coming months. According to the new version of the Annual Financing Plan (PAF), unveiled at the end of May, the stock of the federal public debt should close out 2021 between $1.112 trillion and $1.173 trillion.
Brazil’s internal government bond debt rose 1.82 percent, going from $981.78 billion in April to $999.59 billion in May.
The country’s external federal public debt sank 2.64 percent, from $47.95 billion in April to $46.69 billion in May. In addition to a 3.17 percent decline in the dollar last month, a total of $114.73 million in dollar bonds circulating in the international market met their due date.
Financial reserves
Over the last months, the Treasury had boosted the issuance of public bonds to rebuild its public debt cushion (financial reserves used in turbulent times or when a large number of due dates are concentrated). After falling to $196.14 billion in April, these reserves increased to $209.63 billion in May.
As it stands today, these reserves cover approximately 9.6 months of maturity from the public debt. By the end of 2021, $129.68 billion in federal bonds should reach maturity.
As the public debt increases, the government borrows money from investors to meet financial commitments. In exchange, it pledges to return the funds a few years later, with correction, which may observe the benchmark interest rate (Selic), inflation, or the dollar, or else be pre-arranged.
