The government took advantage of expectations of lower inflation to earn pesos on the market and this Wednesday it placed $326,000 million. The last debt auction of the year was thus authorised cover the week’s deadlines and obtain additional fundingencouraged by a renewed investor appetite based on an improvement in real yields and available liquidity on the market.
The Ministry of Economy received 1,426 bids in an auction in which it awarded 67% of the amount offered, enough to cancel payments of $62,000 million. that way, Treasury ended December with a $700,000 million “cushion” (after covering maturities). “We worked a lot with banks, mutual funds, there was good acceptance and a good climate,” they said from the Palacio de Hacienda.
For analysts, the result is due, among other things, to the slowdown in inflation to 4.9% in November and the expectation of a level around 5.3% in December, which made it possible to offer equal returns or lower than the previous tender. In this context, the Treasury traded three securities with fixed rates ranging between 84 and 87% per annum nominal, equal to an effective rate of up to 110.14% in the case of the Letter in Pesos (Lede) in May, which he captured half of what was allotted.
“I think the latest March and April inflation and rates data that we see are interesting in real terms. If the January and February bills compressed a lot, perhaps they are looking for the most efficient rate in the short term, the market is not quite ready for the long term, but they see that inflation has been better and buying dollars has been enough to make it to the end of the year, then they extend the terms for another month and look for yields,” said a market source.
Meanwhile, the public sector would have collaborated through a mechanism that for now winks at the IMF, through which state agencies, including banks, provinces and municipalities, buy Treasury bills and then sell them to the Central Bank. “In addition to the fact that some private sector players are swapping LECER to incorporate LEDES given the more optimistic inflation projections for the next three months, we have no doubt that the largest demand is coming from the public sector,” PPI said.
Already in the last tender it is estimated that entities such as PAMI and ANSES obtained securities after having made room in their portfolio with the previous transfer of part of the security to the BCRA. This, combined with inflation-adjusted and dollar-adjusted instruments to private banks and importers, facilitated the placement of $770,000 million, which came as a surprise and helped defuse tensions due to funding difficulties in the month of November.
All eyes are now on the first auction of the year on January 18, the month in which maturities exceed $1 trillion, which will be followed by similar challenges in the following months.
Charles Arterburn is a seasoned business journalist for News Rebeat, where he provides comprehensive coverage of the latest trends and developments in the world of finance and economics.