Federal public debt grows 2.95% in June – 07/21/2023 – Market

Brazil’s federal public debt grew by 2.95% in June compared to the previous month, to R$6.191 trillion, announced the National Treasury this Friday (21), citing a favorable environment for issuances.

In the same period, the internal public securities debt increased by 3.3%, to R$5.957 trillion, under the impact of net issuance in the amount of R$145.33 billion and positive interest appropriation of R$44.93 billion.

In an interview with journalists to comment on the Monthly Debt Report, the coordinator of public debt operations at the Treasury, Roberto Lobarinhas, cited a very favorable environment for issuing debt in June.

“June was extremely positive for the markets, positive for debt issuance; we noticed an increase in risk appetite after the resolution of the US debt impasse”, he assessed.

In addition, domestic factors such as the reduction in inflation expectations and the improvement in Brazil’s credit rating outlook by the risk rating agency S&P weighed positively, as well as the advancement of the government’s economic agenda in Congress, said Lobarinhas.

The participation of fixed-rate securities in the total debt rose to 27.04% in June, from 26.17% in the previous month. As for securities linked to price indices, they fell to 29.46%, from 29.76% before, and those corrected by the Selic rate fell to 39.52%, from 39.74%.

Meanwhile, the Treasury’s liquidity cushion increased, in nominal terms, by 13.76%, to R$1.118 trillion in June, the Treasury said. The amount is enough to cover payments for 8.52 months of debt maturities, above the three-month limit that the Treasury considers prudent for debt management.

Additional reporting by Luana Maria Benedito