Brazil’s public debt hit new high of R$5.06 trillion in January

RIO DE JANEIRO, BRAZIL – Brazil’s record public debt pile rose further above R$5 trillion (US$920 billion) in January, while rock-bottom interest rates continued to anchor the cost of servicing it near all-time lows, data showed on Wednesday, February 24th.

Total federal debt rose 1% in January to R$5.06 trillion (US$932 billion), while the total domestic debt stock rose 1.2% to R$4.82 trillion, Treasury said.

It said its liquidity cushion, essentially an emergency cash buffer, fell 8.6% in nominal terms from the previous month to R$805.7 billion.

“It should be noted that this indicator may change significantly over the coming months, especially those with high volumes of debt maturing,” Treasury said.

Luis Felipe Vital, head of debt management, told reporters in an online press conference that January’s R$155 billion of debt issuance was a record for that month, and the liquidity cushion covers more than six months of debt coming due.

According to Treasury figures, R$605 billion of domestic federal debt comes due in the first four months of this year, with R$283 billion needing to be rolled over in April alone, the most ever for a single month.

Vital said the recent turbulence in local markets and spike in long-term interest rates was “not a problem” for the Treasury, adding that it had no plans to alter its debt auction schedule as a result.

The average interest rate on the domestic federal debt stock fell to a new low of 7.15% from 7.3%, Treasury said, but the average rate on new domestic debt issued in the 12 months to January rose to 4.65% from a record low of 4.44%.

Treasury said the average maturity on the domestic debt stock in January edged up to 3.41 years from a record low 3.39 in December, and the average maturity on the overall federal debt stock rose to 3.61 years from 3.59.