The Federal Public Debt (DPF) stock grew 2.34% in November and closed the month at R$ 5.498 trillion. The data were released this Wednesday, 22, by the National Treasury. In October, the stock was at R$5.373 trillion.
The adjustment of interest on FPD stock was R$ 41.09 billion last month, while there was a net issue of R$ 84.64 billion.
FPD includes domestic and external debt. The internal Federal Public Securities Debt (DPMFi) increased 2.48% in November and closed the month at R$ 5.232 trillion. The external Federal Public Debt (DPFe) was 0.41% lower in the month, totaling R$ 266.30 billion at the end of November.
Amid the hike in the basic interest rate, the share of Selic-linked FPD bonds rose again in November, to 36.69%. In October, it was at 36.15%.
Fixed rate papers, on the other hand, reduced their share, from 29.04% to 28.89%, and are below the range provided for in the 2021 Annual Financing Plan (PAF), which ranges from 31% to 35% for these bonds.
Inflation-linked bonds dropped to 29.32% of FPD stock in November, down from 29.57% in October. Exchange papers reduced their participation in DPF from 5.24% in October to 5.10% last month.
Twelve months
The Treasury also informed that the portion of FPD maturing in 12 months decreased, from 21.50% in October to 21.31% in November.
The average term of the debt dropped from 3.97 years in October to 3.92 years in November.
The 12-month accumulated average cost of FPD increased from 8.02% per year to 8.62% per year last month.
Participations
The participation of foreign investors in the total Public Debt increased again in November. According to data released by the National Treasury, the share of non-resident investors in Brazil in the DPMFi stock increased from 10.46% in October to 10.52% last month.
At the end of 2020, the share was at 9.24%. The stock of paper in the hands of foreigners totaled BRL 550.54 billion in November, compared to BRL 533.86 billion in October.
Financial institutions continued to account for the largest share of DPMFi with 29.03% in November, compared to 28.76% in October. The share of investment funds rose from 23.76% to 23.82% in last month.
As a result, the Pensions group went from a participation of 22.71% to 22.31% from one month to the other. Insurers went from 4.06% to 3.99% in the same comparison.
debt mattress
The National Treasury ended November with R$ 1.096 trillion in the so-called “debt mattress”, the liquidity reserve created to honor commitments to investors who buy Brazilian bonds. The observed value is 8.51% higher in nominal terms than the R$ 1.010 trillion that were in reserve in October. The amount is still 34.35% higher than that observed in November 2020 (R$ 816.46 billion).
The disclosure of the exact amount of the “debt mattress” was adopted earlier this year and is an initiative by the Treasury to increase transparency on this data, which serves as a thermometer to know whether the country has the resources to pay its investors or will need to quickly resort to the market to reinforce cash.
At the beginning of the covid-19 pandemic, the high liquidity cushion was essential so that the Treasury could refrain from issuing large volumes of bonds at a time of strong market volatility, which could result in a high cost of financing.
Last year, the Treasury ended up with a debt cushion even above that observed in 2019, after taking advantage of a favorable window for issuances at the end of the year. The objective now is to maintain, throughout 2021, the liquidity cushion above its prudential level. The National Treasury also emphasizes that it does not set targets for the minimum size of the liquidity reserve.
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