(Adds further information in paragraphs 2-7) BRASILIA, Oct 29 (Reuters) – Brazil's public debt fell 0.28% in September from the previous month, Treasury data showed on Wednesday, as net redemptions outpaced interest charges during the period. Outstanding debt ended the month at 8.122 trillion reais ($1.50 trillion), compared with the Treasury's new year-end target between 8.5 trillion and 8.8 trillion reais. The Treasury raised its year-end forecast in September, reflecting its strategy of frontload bond sales ahead of an expected increase in market volatility in 2026, when Latin America’s largest economy will hold general elections. Last month, federal debt issuance totaled 174.95 billion reais, below redemptions of 268.08 billion reais. Interest charges reached 70.14 billion reais. So far this year, federal public debt has risen 11.02%, equivalent to 805.94 billion reais — with 77.2% of that increase stemming from interest payments and the remainder from net bond issuance to finance government spending. The government also reported that the average cost of domestic debt issuance over the past 12 months rose to 13.74% in September from 13.70% in the previous month, marking a sharp increase from 10.74% a year earlier. ($1 = 5.4039 reais) (Reporting by Marcela Ayres in Brasilia; Editing by Leslie Adler and Natalia Siniawski)
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