(Adds finance ministry comments)
BRASILIA, Jan 4 (Reuters) - The Brazilian Treasury issued 40 billion reais ($9.91 billion) in new debt on Monday to provide liquidity for central bank monetary policy operations, the finance ministry said.
The sale came just days after the Treasury repaid 55.6 billion reais in debts owed to state-run banks and a state workers' fund.
The central bank was expected to mop up the excess liquidity with bond sales.
The finance ministry via its press office did not answer a Reuters query on whether the debt sale was aimed at compensating the central bank.
The ministry said the operation is not uncommon, citing the sale of 74.9 billion reais in debt 2015 as government bonds held by the central bank expired.
The issuance was equally divided between fixed-rate notes known as LTN and floating-rate notes known as LFT.
"The issuance is necessary to keep daily liquidity conditions balanced, so that market Selic interest rates are in line with the target set by the monetary policy committee, Copom," the ministry said in a statement.
In that statement, the ministry said the issuance was expected by the market as 141.9 billion reais in government debt came due on Jan 1.
The central bank is expected to resume hiking interest rates at its next meeting on Jan. 20 to drive down inflation expectations that have risen rapidly as the country's fiscal crises worsens. At 14.25 percent, the Selic stands as one of the world's highest benchmark rates. ($1 = 4.0380 Brazilian reais) (Reporting by Alonso Soto and Silvio Cascione; Editing by Chris Reese and Jonathan Oatis)