Brazil sells $3.2 billion short-term bond as revised 2020 debt, deficit to hit record


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Brazil sells $3.2 billion short-term bond as revised 2020 debt, deficit to hit record

Brazil’s Treasury Secretary Mansueto Almeida said in a statement on Friday that the Latin America’s largest economy had sold off more than $3.2 billion (18 billion Brazilian Reais) worth of short-term debts a day earlier, remarking the country’s biggest bond sale this year alongside an affluent Government approach aimed at raising funds at the shorter segment of the yield curve.

Apart from that, in an online event arranged by the Recife, Pernambuco-based business group Lide Pernambuco, Almeida had also added that the Brazilian Treasury had been exploring a long-term option of maintaining the country’s debt-maturity duration at just over four years, since the Latam nation seems to have shored up efforts to heighten up borrowings in a bid to finance emergency measures amid a steep drop of appetite for long-term debts.

Besides, a spokesman for the Brazilian Treasury was also quoted Almeida as saying on Friday that the Brazilian Government had mostly sold off 6-month maturity debt-papers at an interest rate of 2.58 per cent on Thursday, while a few 6-year maturity LFT bonds, a specific Brazilian debt with floating interest rates, were sold at an interest rate of 3.0 per cent.

Year’s biggest bond sales come up as revised 2020 debt, deficit to hit record

In point of fact, Almeida’s Friday’s remark comes over the heels of a growing holocaust in Brazilian economy amid the pandemic outbreak, while the Brazilian Commerce Department had forecasted earlier in the day that its debt would hit a record high of 93.7 per cent of the nation’s entire GDP (Gross Domestic Product) this year.

Meanwhile, adding that the Latam nation had been witnessing a sharp drop in long-term debts amid a growing fiscal pandemonium and it might need to “print money” over the coming months in order to fund the Government’s persistently inflating budget deficits and debts that in effect would risk a devaluation of the nation’s currency, Almeida said shortly after the Brazil’s Commerce Department had forecasted its debts and deficits would soar to a record-level this year on Friday, “We are selling more short-term debt.

Even before the crisis purchases of bonds of 10 years or longer from pension funds and foreign investors were declining. Unfortunately, Brazil is not like other (developed) countries where if rates fall to zero investors still have confidence in the currency.Financing the deficit by printing money does not work in Brazil, and in my opinion, is very dangerous.