Federal public debt falls 3.07% in January, to R$ 5.769 tri – 02/28/2023 – Market

Federal public debt fell 3.07% in January over December, to R$5.769 trillion, due to strong net withdrawals, as the government refrained from issuing larger volumes of bonds amid rising costs, the National Treasury said this week. Tuesday (28).

In the period, the internal public securities debt fell by 2.88%, under the impact of a net redemption of bonds in the record amount of R$ 216 billion, which contributed to take the stock to R$ 5.535 trillion.

The share of fixed-rate securities in total debt, which accounted for more than 90% of redemptions in the month, fell to 23.5%, from 27% in December. As for securities linked to price indices, they increased to 31.7%, from 30.3% before, and those indexed by the Selic rate increased to 40.5%, from 38.3%.

With the net redemption last month, the Treasury’s liquidity cushion was reduced by 18.92%, to R$953.4 billion. The amount is enough to cover payments for almost eight months of debt maturities, above the three-month limit that the Treasury considers prudent for debt management.

In a note, the Treasury highlighted that January was marked by greater risk aversion in the domestic market, amid feelings of uncertainty regarding the economic scenario for the year.

“January was a month of very intense news. There was a lot of talk about economic policy, inflation, and this translated into high interest rates and this steeper slope in the interest curve”, said the general coordinator of Public Debt Operations of the Treasury, Luís Felipe Vital, after the release of the numbers.