Brazil debt profile worsens as floating-rate share hits fresh high

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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