Brazil’s Federal Public Debt Increases 1.85% in November

Brazil’s Federal Public Debt (DPF) reached R$ 7.204 trillion ($1,162 billion) in November, a 1.85% increase from October. This figure remains within the Annual Financing Plan (PAF), which sets limits between R$ 7 trillion ($1,129 billion) and R$ 7.4 trillion ($1,194 billion).

The Internal Federal Public Debt (DPMFi) climbed to R$ 6.863 trillion ($1,107 billion), while the External Federal Debt (DPFe) rose to R$ 340.76 billion ($55 billion).

These numbers indicate a growing reliance on both domestic and foreign borrowing. In November, the government issued R$ 83.28 billion ($13 billion) in new debt while redeeming R$ 26.90 billion ($4 billion).

This resulted in a net issuance of R$ 56.38 billion ($9 billion). The DPMFi contributed most to this net issuance, totaling R$ 56.88 billion ($9 billion). The percentage of DPF maturing within twelve months decreased slightly to 17.92%.

The average maturity period for the debt dropped from 4.16 years to 4.12 years, with the average life of the debt now at 5.47 years. Investors should note the changing composition of the DPF.

Post-fixed securities increased their share to 46.13%, while fixed-rate securities slightly decreased to 22.14%. Inflation-linked bonds accounted for 27.01%, and currency-linked instruments rose to 4.72%.

Brazil’s Financial Stability

Brazil’s liquidity cushion improved to R$ 856 billion ($138 billion), allowing the government to cover upcoming debt maturities for about 7.25 months, up from 6.86 months in October.

Non-resident investor participation in the DPMFi increased from 10.75% to 11.25%, indicating growing foreign interest, with their absolute investment rising from R$ 725.28 billion ($117 billion) to R$ 771.93 billion ($125 billion).

The average cost of the DPF also rose to 11.53%, reflecting higher borrowing costs for the government. These figures highlight Brazil‘s ongoing challenge of managing its public debt.

This is amid economic fluctuations and investor expectations. Understanding these dynamics is crucial for anyone interested in Brazil’s financial landscape and future economic stability.

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