Brasília- US dollar sales on the futures market aiming to hold back the dollar price hike have caused internal bond debt to reach its highest level in 11 years. The internal bond debt, adjusted by foreign currencies, stood at R$ 204.09 billion (US$ 86.6 billion) by the end of January, the highest value since March 2003, when the debt amounted to R$ 225.44 billion (US$ 96 billion).
The bond-to-debt ratio was 9.22% December and 10.47% in January. The ratio is the highest since October 2004’s 11.24%.
Although they do not involve bond issuance, traditional bond swapping operations interfere with the composition of the Federal Public Debt as per the criteria adopted by the Central Bank. As per the criteria used by the National Treasury, which disregards swapping, the bond-to-debt ratio has gone from 0.57% in December to 0.61% in January.
The bond-to-debt ratio tends to increase over the next few months as a result of the Central Bank’s decision to extend futures market dollar sales up until June 2014. Since August, the bank has been injecting US$ 500 million a day via swap auctions. In January, the volume was reduced to US$ 200 million a day.
*Translated by Gabriel Pomerancblum
