Treasury Secretary Bruno Funchal told Reuters this week the spike in market-based rates was a “warning” and said policymakers have “no room for error” to return to fiscal discipline. The steepening of the Brazilian rate curve reflects investors demanding higher premiums to lend longer term to the government due to growing worries over its ability to reduce record pandemic-fueled borrowing. BRASILIA, Sept 23 (Reuters) - Despite a spike in Brazil’s long-term interest rates serving as a “warning” to remedy public finances, the central bank’s record low official interest rate means there is little risk - if any - to the government’s ability to service its ballooning debt.
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