BRASILIA, Sept 28 (Reuters) – Brazil’s share of debt linked to the benchmark Selic rate jumped to 52.7% in August from 51.1% in July, Treasury data showed on Monday, extending a deterioration in the country’s debt profile.
• A larger share of debt tied to the Selic rate leaves the government’s liabilities more exposed to monetary policy, allowing high borrowing costs to feed more directly into debt accumulation.
• The increase came just one month after the Treasury raised its 2026 ceiling for floating-rate debt to 53%.
• Despite an easing cycle launched in March, Brazil’s benchmark Selic rate stands at 13.75%, one of the highest real interest rates globally.
• The data underscores the trade-off facing Latin America’s largest economy: while elevated interest rates help contain inflation, they also increase debt-servicing costs.
• In August, Brazil’s federal public debt rose 0.04% from the previous month to 9.293 trillion reais ($1.78 trillion), driven by interest costs, which totaled 88.4 billion reais.
• Brazil posted a net debt redemption in August, with bond issuance totaling 211.6 billion reais and maturities reaching 296.1 billion reais.
($1 = 5.2108 reais)
(Reporting by Marcela Ayres; Editing by Fernando Cardoso and Iñigo Alexander)
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