– “They called me and told me how many pesos I had in my wallet. It was the correct number. We were ‘invited’ to participate”.
-“The tender closed much later because they had to call people from the public sector”.
The sentences correspond to economists working in financial groups (a well-known city bank and a mutual fund, both of whom have requested anonymity).
The testimonies summarize how the economic team and the finance secretary have approached the December race this week, especially after the performance in November (the worst since April), and facing the wall of commitments since January: an average of trillion pesos per month on the eve of STEP 2023.
The Ministry of Economy not only rolled over $413 billion of overdue debt, mostly with private banks, mutual funds, provinces and organizations, but also obtained $417 billion in extra cash. This means a renewal rate of more than 200%.
70% of the total offers came from private market operators according to official sources. About the total allotted 60.4% correspond to public and private banks. Followed by mutual funds (13.5%), FGS (12.8%), companies (9.6%), provinces (2.1%), insurance companies (0.3%) and the rest (1.4%) .
The excess of pesos and the imminence of the closing of the balance sheets in these entities prompted private individuals to accompany the transfer of Sergio Massa: short-term discount bills, in March and April 2023 (concentrated at 54% of supply), effective monthly installments paid at around 6.7%“above the inflation that we project for the next few months,” says the report by the consulting firm Equilibra, by Diego Bossio and Martín Rapetti.
“With inflation at 4.9%, the Central Bank rate at 6.2% and that of the LEDES at 6.7”, underlined the consultancy firm Eco Go, “The financial perspectives have changed since a few days ago.”
There were doubts in the market about Finance’s ability to cancel these deadlines. The questions were motivated by a series of data, namely the adhesion to the exchange rate of 61% in November compared to 85% in August, the withdrawal of deposits from the Central for 180,897 million dollars by the Treasury to finance the (and in October it was $170.749 million) and the rollover rate of the last November race was 83%, the lowest since April.
“All those forecasts and those alarmist articles in the newspapers have turned out to be wrong”, they comment today in Economia. They argue that the technical analyzes of economists and the market do not take into account the reaction of politics that the minister has shown. “The year in terms of public sector funding is over and today’s papers obviously say none of that,” Massa said at a public event this week after breaking a string of several weak races.
The positive outcome of the tender, beyond the task performed by the policy of the Ministry of the Economy, was not even celebrated by the market. Either because the tender reflected a public sector asset management operation (it was not for nothing that the operation was closed almost at eight in the evening), or because there were phone calls and Whatsapp messages to banks and private companies (as for the agreements on prices, there would have been promises to individuals that if they entered the tender they would have access to buy foreign currency in the Mulc) or even a decree from the previous Saturday amending Fondep’s regulation to allow it to make direct loans to national public banks and thus grant long-term financing.
Economist Javier Alvaredo, of ACM, acknowledges that the result of the tender will however help to curb one of the engines of inflation. “This week is tender allowed a decisive advance in the closing of the financial programmewhich reduces the risk of having to resort to issuing money”.
In Finance they are satisfied with the result despite admitting it “the year will be long” in financial matters.
A key question will be the role of the opposition and the candidates. Is that in 2019 Kirchnerismo, with its promise to reverse the program that Mauricio Macri had signed with the IMF in 2018 (and which curiously ended up endorsing the same one that Nicolás Dujovne was negotiating: replacing the standby with one of extended easing), the financing horizon has shortened, the rollover rates have dropped to 0 and Macrismo has ended up remodeling the debt, an issue and term that Massa doesn’t even want to hear about because it adds noise to management. And one of the coincidences with Together for Change and its economists because it was the opposition that bit that apple of original sin.
Source: Clarin
