Public debt rises 2.34% in November and approaches R$ 5.5 trillion
The low volume of maturities in November made the Federal Public Debt (FDP) rise after two consecutive months of decline. According to figures released today (24) by the National Treasury, FPD rose from R$5.373 trillion in October to R$5.499 trillion in November, an increase of 2.34%.
The Treasury predicts that the FPD will continue to rise. According to the Annual Financing Plan (PAF), revised at the end of May, the FDP stock should end 2021 between R$5.5 trillion and R$5.8 trillion.
Domestic Public Securities Debt (in bonds) (DPMFi) rose 2.48%, from BRL 5.106 trillion in October to BRL 5.233 trillion in November. Last month, the Treasury issued R$85 billion in bonds more than it redeemed, mainly in papers linked to the Selic rate (basic interest rate for the economy).
In addition to the net issue, there was an appropriation of R$ 41.83 billion in interest. Through the appropriation of interest, the government recognizes, month by month, the correction of interest on bonds and incorporates the value into the stock of public debt.
Last month, the Treasury issued R$ 102.77 billion in DPMFi bonds, the second-lowest level of the year. However, the low volume of maturities last month made net issuance continue with a positive balance. In November, they won R$17.77 billion, almost all of them in inflation-adjusted bonds.
The increase was not greater because the Federal External Public Debt (FDPe) dropped 0.41%, from R$ 267.41 billion in October to R$ 266.3 billion in November. The main factor was the small drop of around 0.4% in the dollar last month.
Mattress
After falling in the last two months, the public debt cushion (financial reserve used in times of turmoil or strong concentration of maturities) rose again in November. This reserve went from BRL 1.011 trillion in October to BRL 1.097 trillion last month.
Currently, the mattress covers almost a year of public debt maturities. In the next 12 months, the maturity of R$ 1.155 trillion in federal bonds is expected.
In the first months of the covid-19 pandemic, the government burned part of this mattress to compensate for instability in the financial market. In November last year, the Central Bank had to transfer R$ 325 billion to the Treasury to help rebuild this reserve. The rest is being done with new issues.
In April, the Amendment to the Constitution of the New Fiscal Framework, originating from the Emergency PEC, reinforced the mattress with another R$ 140 billion from the untying of the surplus from public funds.
Composition
The low volume of maturities and the high issuance of bonds linked to the Selic rate changed the composition of the FPD. The proportion of this type of paper rose from 36.15% to 36.69%. The PAF predicts that the indicator closes in 2021 between 33% and 37%. This type of paper has once again attracted the interest of buyers due to recent increases in the Selic rate.
The share of fixed-rate bonds (with a defined yield at the time of issuance) dropped from 29.04% to 28.89%. The PAF predicts that the portion of the Federal Public Debt corrected by this indicator will end the year between 31% and 35%. The Treasury has been issuing fewer preset papers, due to the turmoil in the financial market in recent months. These bonds are in greater demand at a time of economic stability.
The share of inflation-adjusted bonds in FPD was practically stable, moving from 29.57% to 29.32%. Composed of former internal debt securities adjusted in dollars and external debt, the weight of the exchange rate on the public debt rose from 5.24% to 5.1%. Both types of indexes are within the limits established by the PAF for the end of 2021, between 26% and 30% for papers linked to inflation, and between 3% and 7% for exchange rates.
Holders
Financial institutions continue to be the main holders of the internal Federal Public Debt, with a 29% share in the stock. Investment funds, with 23.8%, and pension funds, with 22.3%, appear next on the list of debt holders.
Despite the financial market turmoil in November, the participation of non-residents (foreigners) remained stable, remaining at 10.5% in November. The percentage is at its highest level since February 2020, before the covid-19 pandemic began. The other groups account for 14.3% of participation, according to data collected in the month.
Through public debt, the government borrows money from investors to honor financial commitments. In exchange, it undertakes to return the funds after a few years, with some correction, which may follow the Selic rate (basic interest rate on the economy), inflation, the dollar or be fixed in advance (set in advance).
Text translated using artificial intelligence.
