Debt Management in Brazil: Evaluation of the Real Plan and Challenges Ahead
Brazil's domestic debt has posed two challenges to policymakers: it has grown very fast and, despite progress, remains extremely short in maturity. The authors analyze Brazil's experience with domestic public debt management, searching for policy prescriptions for the next few years. After...
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| Format: | Publications & Research |
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World Bank, Washington, DC
2015
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| Online Access: | http://hdl.handle.net/10986/21404 |
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okr-10986-214042021-04-23T14:04:02Z Debt Management in Brazil: Evaluation of the Real Plan and Challenges Ahead Bevilaqua, Afonso S. Garcia, Marcio G.P. accounting accounting framework assets auctions balance sheet balance sheets banking sector banking system bond issues bonds cash management central bank commercial banks credit programs credit rationing debt debt instruments debt management debt maturity debt renegotiations debt service debts defaults demand curve depreciation devaluation development projects development strategy domestic debt domestic public debt economic situation emerging markets excess demand exchange rates expected returns external debt financial crises financial institutions financial markets fiscal deficits fiscal policy fiscal surplus foreign assets foreign debt GDP government debt indexation inflation inflation rate installments institutional development interest rate interest rates liquidation liquidity macroeconomic analysis macroeconomic conditions market risk monetary policy municipalities outstanding debt price levels private banks private sector privatization public debt public debt management public expenditures public finance public revenues public savings public sector recapitalization redemption regional development banks repayment solvency state owned enterprises term bonds treasury wages wealth debt management domestic debt inflationary pressures federal funds markets macroeconomic context interest payments assets gross domestic product government bonds indexation debt repayments currency devaluation currency issuance currency selection currency substitution Brazil's domestic debt has posed two challenges to policymakers: it has grown very fast and, despite progress, remains extremely short in maturity. The authors analyze Brazil's experience with domestic public debt management, searching for policy prescriptions for the next few years. After briefly reviewing the recent history of the country's domestic debt, they decompose the large rise in federal bonded debt in 1995-98, searching for its macroeconomic causes. The main explanations: extremely high interest payments (caused by Brazil's weak fiscal stance and quasi-fixed exchange rate regime) and the accumulation of assets (especially obligations of Brazil's states). Simulations of the net debt path for the near future underscore the importance of a tighter fiscal stance to prevent the debt-to-GDP ratio from growing further. The authors' main policy advice is to foster and rely more on inflation-linked bonds--the least harmful way to lengthen debt maturity. 2015-02-04T21:52:04Z 2015-02-04T21:52:04Z 2000-07 http://hdl.handle.net/10986/21404 en_US Policy Research Working Paper;No. 2402 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Latin America & Caribbean Brazil |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
en_US |
| topic |
accounting accounting framework assets auctions balance sheet balance sheets banking sector banking system bond issues bonds cash management central bank commercial banks credit programs credit rationing debt debt instruments debt management debt maturity debt renegotiations debt service debts defaults demand curve depreciation devaluation development projects development strategy domestic debt domestic public debt economic situation emerging markets excess demand exchange rates expected returns external debt financial crises financial institutions financial markets fiscal deficits fiscal policy fiscal surplus foreign assets foreign debt GDP government debt indexation inflation inflation rate installments institutional development interest rate interest rates liquidation liquidity macroeconomic analysis macroeconomic conditions market risk monetary policy municipalities outstanding debt price levels private banks private sector privatization public debt public debt management public expenditures public finance public revenues public savings public sector recapitalization redemption regional development banks repayment solvency state owned enterprises term bonds treasury wages wealth debt management domestic debt inflationary pressures federal funds markets macroeconomic context interest payments assets gross domestic product government bonds indexation debt repayments currency devaluation currency issuance currency selection currency substitution |
| spellingShingle |
accounting accounting framework assets auctions balance sheet balance sheets banking sector banking system bond issues bonds cash management central bank commercial banks credit programs credit rationing debt debt instruments debt management debt maturity debt renegotiations debt service debts defaults demand curve depreciation devaluation development projects development strategy domestic debt domestic public debt economic situation emerging markets excess demand exchange rates expected returns external debt financial crises financial institutions financial markets fiscal deficits fiscal policy fiscal surplus foreign assets foreign debt GDP government debt indexation inflation inflation rate installments institutional development interest rate interest rates liquidation liquidity macroeconomic analysis macroeconomic conditions market risk monetary policy municipalities outstanding debt price levels private banks private sector privatization public debt public debt management public expenditures public finance public revenues public savings public sector recapitalization redemption regional development banks repayment solvency state owned enterprises term bonds treasury wages wealth debt management domestic debt inflationary pressures federal funds markets macroeconomic context interest payments assets gross domestic product government bonds indexation debt repayments currency devaluation currency issuance currency selection currency substitution Bevilaqua, Afonso S. Garcia, Marcio G.P. Debt Management in Brazil: Evaluation of the Real Plan and Challenges Ahead |
| geographic_facet |
Latin America & Caribbean Brazil |
| relation |
Policy Research Working Paper;No. 2402 |
| description |
Brazil's domestic debt has posed two challenges to policymakers: it has grown very fast and, despite progress, remains extremely short in maturity. The authors analyze Brazil's experience with domestic public debt management, searching for policy prescriptions for the next few years. After briefly reviewing the recent history of the country's domestic debt, they decompose the large rise in federal bonded debt in 1995-98, searching for its macroeconomic causes. The main explanations: extremely high interest payments (caused by Brazil's weak fiscal stance and quasi-fixed exchange rate regime) and the accumulation of assets (especially obligations of Brazil's states). Simulations of the net debt path for the near future underscore the importance of a tighter fiscal stance to prevent the debt-to-GDP ratio from growing further. The authors' main policy advice is to foster and rely more on inflation-linked bonds--the least harmful way to lengthen debt maturity. |
| format |
Publications & Research |
| author |
Bevilaqua, Afonso S. Garcia, Marcio G.P. |
| author_facet |
Bevilaqua, Afonso S. Garcia, Marcio G.P. |
| author_sort |
Bevilaqua, Afonso S. |
| title |
Debt Management in Brazil: Evaluation of the Real Plan and Challenges Ahead |
| title_short |
Debt Management in Brazil: Evaluation of the Real Plan and Challenges Ahead |
| title_full |
Debt Management in Brazil: Evaluation of the Real Plan and Challenges Ahead |
| title_fullStr |
Debt Management in Brazil: Evaluation of the Real Plan and Challenges Ahead |
| title_full_unstemmed |
Debt Management in Brazil: Evaluation of the Real Plan and Challenges Ahead |
| title_sort |
debt management in brazil: evaluation of the real plan and challenges ahead |
| publisher |
World Bank, Washington, DC |
| publishDate |
2015 |
| url |
http://hdl.handle.net/10986/21404 |
| _version_ |
1764448165475385344 |