Brazil debt profile worsens as floating-rate share hits fresh high
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.($1 = 5.2108 reais)
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(Recasts with further data, context) 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) ((mailto:marcela.ayres@thomsonreuters.com; +55 11 5047-2444;)