In September, Brazil’s Federal Public Debt (FPD) decreased by 3%, settling at 6.028 trillion reais, approximately 1.2 trillion dollars.
The National Treasury said the reduction mostly came from bonds reaching maturity dates.
For some background, the FPD crossed the 6 trillion reais mark for the first time in April. The recent drop keeps the debt below government forecasts.
An Annual Financing Plan released earlier this year expected the debt to be between 6.4 and 6.8 trillion reais. That’s about 1.28 to 1.36 trillion dollars.
Let’s look at domestic tradable debt, known as DPMFi. It fell by 3.22% in September.
The Treasury redeemed more bonds than it issued, to the tune of 243.53 billion reais or roughly 48.7 billion dollars.
These bonds were mainly tied to Brazil’s basic interest rate.
Now, what about interests? They partially offset the debt reduction. In September, interest payments added about 49.7 billion reais, close to 9.94 billion dollars, to the debt.
The Treasury also issued new bonds worth 79.682 billion reais. This was its lowest issuance since February.
Interestingly, the Treasury repaid a high volume of debt in September. It repaid about 323.218 billion reais, which is roughly 64.621 billion dollars.
This is the highest repayment amount since April of last year.
On the international front, Brazil’s debt increased due to the U.S. dollar rising in value. The external part of the FPD rose by 3.71%.
It increased from 237.46 billion reais in August to 241.78 billion in September. That’s from about 47.5 billion to 48.34 billion dollars.
Who Holds Brazil’s Public Debt
Brazil also has a financial cushion, essentially a reserve for difficult times. This cushion shrank in September, dropping from 1.025 trillion reais to 810 billion reais.
In dollar terms, it decreased from 205 billion to 162 billion. The National Treasury attributed this mainly to heavy redemptions in September.
Who holds most of Brazil’s public debt?
Financial institutions are at the top, owning 28.6%. Investment funds come next at 23.4%, and pension funds hold 23.1%.
These institutions lend money to the government, expecting it to be paid back later, often with interest.