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Brazil's foreign debt in May was US$ 5.956 billion less than in March, according to an estimate published yesterday, June 21, by the Economic Department of the Central Bank (BC) in May's report on the Foreign Sector.
The stock of debt at the end of May amounted to US$ 160.696 billion, excluding intercompany loans, which refer to the more than US$ 20.852 billion transferred by foreign-based multinational corporations to their Brazilian subsidiaries. In its accounts, the BC treats these transfers as direct investments in the productive sector. According to the report, the reduction is partly the consequence of a bond repurchase operation in which the Brazilian government retired US$ 270 million in foreign debt. Another US$ 679 million represents the liquidation of debt owed to the Paris Club. The document points out that it is also necessary to consider the inflow of US$ 1.155 billion in World Bank (IBRD) loans for public sector adjustment programs: US$ 500 million for the housing sector and US$ 655 million for fiscal reform. The head of the BC's Economic Department, Altamir Lopes, explained that medium and long-term foreign debt amounts to US$ 143.159 billion, while short-term debt, which must be repaid by private and government banks over the next 12 months, amounts to US$ 17.537 billion. The BC report shows that, while the debt shrank, international reserves rose US$ 6.829 billion in comparison with the previous month's balance. The stock of international reserves amounted to US$ 63.381 billion at the end of May, mainly in consequence of net domestic market purchases of US$ 4.359 billion. Agência Brasil
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