Brazil's government will make it a priority in 2011 to build a yield curve for its real-denominated global bonds, Deputy Treasury Secretary Paulo Valle said on Friday. The move is part of a plan to build up a real-denominated debt market abroad, providing an alternative to capital inflows into Brazil, which have strengthened the local currency at the expense of local exporters.
With greater liquidity for the securities abroad, Brazilian corporate issuers would also be able to tap the market in reais, reducing their currency risk, Valle added. "This year our priority will be to build a real-denominated yield curve in markets abroad, with the possible creation of new benchmarks between 10-year and 30-year maturities," Valle said in the Thomson Reuters Trading Brazil chatroom.
He said the Treasury would also seek to add liquidity for its 10-year and 30-year dollar-denominated global bonds. Brazil's National Treasury would also continue its strategy of building the long end of the interest rate curve, Valle said. "The Treasury's main strategy is to create an interest rate curve with good liquidity to consolidate the long-end of the curve," Vale said.
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