Key facts
- Brazil's Finance Minister Dario Durigan signaled a more ambitious primary surplus target for next year.
- The government plans to send legislation to Congress requiring policymakers to formally target the midpoint of the primary balance goal.
- The Treasury intervened in the bond market by canceling debt auctions and conducting buyback operations.
- Brazil's fiscal target for next year calls for a primary surplus of 0.5% of GDP, with a tolerance band of 0.25 percentage point.
Brazil's Finance Minister Dario Durigan stated on Monday that the government intends to pursue a higher primary surplus in the upcoming year, though a specific figure was not provided. This announcement follows market volatility attributed to fiscal concerns after the reelection of President Luiz Inacio Lula da Silva. Durigan also indicated that legislation will be sent to Congress this year to mandate policymakers to formally target the midpoint of the primary balance goal. The Treasury took action in the government bond market by canceling debt auctions and executing buyback operations to stabilize trading after a significant increase in long-term interest rate futures.