Brazil Treasury asks Senate to raise limit on external debt issuance

The Brazilian Ministry of Finance has sent a request to the Senate to replace the current cumulative external debt issuance cap of US$100 billion with an annual limit of US$35 billion. The request notes that foreign‑currency debt already reached US$97.4 billion for the period ending April 2026, threatening to halt the government’s financing schedule. In 2024 the Senate previously raised the cumulative cap from US$75 billion to US$100 billion at the government's urging.

Separately, critics argue that recent Central Bank actions, including Resolução 575/2026 and the pending PEC 65/2023, could increase Brazil’s exposure to foreign capital and raise the risk of dollarisation. They point to persistently high Selic rates, the Central Bank’s expanded powers over capital flows, and the potential for volatile currency movements, warning of broader economic instability.