Brazil Treasury Buys Back US$1.3B of Bonds
Brazil's Treasury bought back about US$1.3 billion of fixed-rate bonds and cancelled two auctions after yields jumped on Lula's re-election. The post Brazil Treasury Buys Back US$1.3B of Bonds appeared first on The Rio Times .
The Brazilian Treasury purchased approximately US$1.3 billion of fixed-rate bonds, repaying about R$7.1 billion, on Monday. This move came shortly after President Luiz Inácio Lula da Silva's re-election, as long-term borrowing costs surged. The Treasury also canceled two scheduled bond sales that week. These bonds, known as NTN-F, pay a fixed rate of interest twice a year, and their prices fluctuate with investor expectations of higher rates.
By purchasing these bonds, the government can avoid paying the current high rates on new debt issuance. The dollar strengthened against the real, resulting in a weaker Brazilian currency. Polymarket predicts a 74.9% chance of no change in the central bank's November rate decision, with a 25-basis-point cut priced at 11.5% and a 25-basis-point increase at 5.2%.
The next data point, the central bank's September gross government debt announcement on October 30, will show how far yields eased after the Treasury's buyback.
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