BRASÍLIA – The economic team must request the transfer of the Central Bank’s profit obtained in the first half of this year to reinforce the National Treasury’s cash, Estadão / Broadcast. The measure will be important to guarantee the necessary resources for public debt management at a time of strong increase in spending and greater difficulty for the country to finance itself in the market. The positive result should exceed R $ 500 billion and can be passed on in the second half, with authorization from the National Monetary Council (CMN).

Transfer of profits from the Central Bank has been done before.

Photo: Marcello Casal Jr./Agência Brasil / Estadão

The exact value of the profit will depend on the reflection of the variation of the dollar in the international reserves and of the result of the BC in the operations equivalent to the sale of the American currency in the future market, the so-called currency swap. Until May 15, the BC recorded a gain of R $ 646.174 billion with reserves and a loss of R $ 79.838 billion with swap operations, which gives a positive result of R $ 566.335 billion in foreign exchange operations.

The Treasury has already burned part of its cash with the increase in government spending to combat the pandemic and with the less favorable conditions for the country to issue bonds and finance itself. Amid the uncertainties brought about by the new coronavirus and its economic effects, investors have been charging higher interest rates to lend to the government, especially in longer-term securities.

The nominal value of the federal public debt has even fallen due to the Treasury’s caution in new issues to avoid an increase in interest costs. In March, it closed at R $ 4.214 trillion, a decrease of 1.55% in relation to the previous month.

In the government’s cash flow, the sub-account of public debt resources has already R $ 750.4 billion in December 2019 to R $ 574.3 billion in March 2020, according to data from the National Treasury.


According to a member of the economic team, there is still room for the government to continue managing the debt without “hurrying” to return to the market. “We are not desperate to raise funds yet in such an uncertain environment,” says this source. The transfer of BC’s profit, however, will be an important reinforcement in the second half.

The transfer of the BC’s profit has already been adopted on other occasions by the government, but not so significantly. At the end of last year, a new law changed the relationship between Treasury and Central Bank, but still allows the transfer “when severe restrictions on liquidity conditions significantly affect its (debt) refinancing”. It is this device that the government intends to implement in the second half. The BC’s profit is used exclusively to pay debt commitments. Despite this effort in management, the country’s total debt should continue to increase.

In addition to caution in emissions, the government has increased spending to face the crisis. The R $ 600 emergency aid paid to informal workers alone should cost R $ 151.5 billion.

The government has already canceled R $ 164.4 billion in appropriations to roll over public debt to pave the way for pandemic emergency spending, such as R $ 600 emergency aid itself. After that, cash resources that can only be used to pay the public debt were relocated to cover the “hole” left, in a sequence of operations dubbed “triangulation of sources” by technicians.

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