In January, Brazil’s federal public debt decreased by 1.08%, landing at R$ 6.45 trillion ($1.29 trillion), the National Treasury disclosed.
This period saw domestic securities debt fall by 1.48% to R$ 6.176 trillion ($1.235 trillion). However, foreign debt climbed by 8.89% to R$ 273.83 billion ($54.77 billion).
The Treasury attributed the domestic debt drop to a net redemption totaling R$ 147.9 billion ($29.58 billion).
This decrease was partially offset by R$ 55.08 billion ($11.02 billion) in interest gains.
A cautious mood prevailed in January, driven by speculations about US interest rate trends.
In Brazil, positive inflation news lowered short-term interest rates, while long-term rates rose due to external influences.
The 12-month average cost of the federal debt edged up from 10.51% to 10.65%. Meanwhile, the average cost for new domestic bond issues slightly decreased.
The average maturity of Brazilian bonds extended to 4.11 years from 3.95 years in December.
The liquidity buffer for debt payments shrank by 17.22% to R$ 813.23 billion ($162.65 billion), enough to cover 7.10 months of maturities.
February saw a notable rise in US Treasuries, influenced by ongoing inflation and a strong US economy.
This situation adjusted expectations for Federal Reserve rate cuts.
In Brazil, short-term interest rates stabilized, but long-term rates increased due to unexpected inflation data and higher US bond rates.
This financial landscape underscores the interconnectedness of global and domestic financial markets, impacting Brazil’s debt management strategies.