The concentration of maturity of securities adjusted by the Selic rate caused the Federal Public Debt (DPF) to fall significantly in March. According to figures released today (28) by the National Treasury, the DPF dropped from BRL 5.73 trillion in February to BRL 5.564 trillion last month, down 2.89%.
Despite the fall in March, the Treasury forecasts that FPD will rise in the coming months. According to the Annual Financing Plan (PAF), presented at the end of January, the DPF stock should end 2022 between R$6 trillion and R$6.4 trillion.
Domestic Public Securities Debt (securities) (DPMFi) fell by 2.69%, from R$5.49 trillion in February to R$5.342 trillion in March. Last month, the Treasury redeemed BRL 204.31 billion in bonds more than it issued, mainly in papers adjusted by the Selic rate (basic interest rates in the economy).
The net redemption was partially offset by the appropriation of R$56.44 billion in interest. Through the appropriation of interest, the government recognizes, month by month, the correction of the interest levied on the bonds and incorporates the value to the stock of public debt. With the Selic rate (basic interest of the economy) rising since August of last year, interest appropriation increases.
Last month, the Treasury issued BRL 66.97 billion in DPMFi bonds. However, redemptions totaled BRL 271.28 billion, almost all in Selic-indexed securities, which usually mature in the last month of each quarter.
The fall in the dollar also contributed to reducing government indebtedness. External Federal Public Debt (DPFe) dropped 7.3%, from R$240.01 billion in February to R$222.5 billion in March. The main factor was the 7.81% drop in the dollar last month.
After two consecutive months of growth, the public debt cushion (financial reserve used in times of turmoil or strong concentration of maturities) fell in March. This reserve increased from BRL 1.278 trillion in February to BRL 1.073 trillion last month.
Currently, the mattress covers almost a year of public debt maturities. In the next 12 months, R$ 1.225 trillion in federal bonds is expected to mature.
The high volume of Selic-linked securities maturities changed the composition of the DPF. The proportion of papers adjusted by basic interest fell from 39.11% to 36.22%. Despite the retreat in March, the PAF predicts that the indicator will close 2022 between 38% and 42%. This type of paper has once again attracted the interest of buyers because of the recent increases in the Selic rate.
The share of fixed-rate securities (with a yield defined at the time of issuance), which had fallen significantly in recent months, recovered and rose from 26.89% to 28.27%. The PAF predicts that the portion of the Federal Public Debt corrected by this indicator will end the year between 24% and 28%.
The Treasury has launched fewer fixed-rate papers, due to the turmoil in the financial market in recent months. These bonds are in greater demand in times of economic stability.
The share of inflation-adjusted securities in the FPD increased, from 29.56% to 31.28%. The PAF predicts that inflation-linked bonds will end the year between 27% and 31%.
Comprising old domestic debt securities adjusted in dollars and the external debt, the weight of the exchange rate on public debt increased from 4.44% to 4.23%. Public debt linked to the exchange rate is within the limits established by the PAF for the end of 2022, between 3% and 7%.
Financial institutions continue to be the main holders of the internal Federal Public Debt, with a 29.5% share in the stock. Investment funds, with 23.3%, and pension funds, with 22.9%, appear next in the list of debt holders.
After closing 2021 at the highest level since before the Covid-19 pandemic, the share of non-residents (foreigners) fell from 10% in February to 9.4% in March. The other groups add up to 14.9% of participation, according to the 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 can follow the Selic rate (basic interest rates in the economy), inflation, the dollar or be fixed in advance (set in advance).