Long-term Treasury yields are unacceptable, says Durigan, eyeing fiscal relief

Statements by Treasury Executive Secretary Dario Durigan pointing out that the long-term interest rates paid by the National Treasury are unacceptable and need to be reduced place the center of the Brazilian economic debate on public debt management efficiency. The official diagnosis shows that the state's borrowing costs consume significant resources that could be directed toward productive investments, triggering a chain effect across the entire financial system and corporate appetite for new projects. This official stance comes at a time when the target Selic rate is firmly anchored at 14.00% per year, remaining stable across 7-day and 30-day horizons, reflecting a still contractionary monetary environment that pressures the cost of money for governments, companies, and households. To understand the magnitude of this fiscal pressure and market reflections, it is essential to analyze the recent behavior of the country's macroeconomic and exchange indicators. While basic interest rates remain high, the 12-month accumulated IPCA stands at 4.44%, showing a downward trajectory compared to 4.64% observed 30 days ago, though still requiring caution from monetary authorities. On the currency front, the USD/BRL exchange rate trades at R$ 5.17, accumulating a 1.47% increase over the 7-day window compared to the previous R$ 5.09, while maintaining a slight 0.63% drop on a 30-month basis, demonstrating controlled yet persistent volatility in the local foreign exchange market.