The public debt repurchase in advance was received with skepticism among analysts. The perception is that the deal that began last Wednesday will bear fruit in the long run, but in the short term it will undermine reserves, which have added another trickle to the rout amid a foreign exchange shortage and severe drought.
“The other side of this operation is the using scarce dollars, while $3,000 million in debt payments are saved over the next 8 years, $1,000 million is lost today against a backdrop of severe drought and a structural target of international reserve accumulation (INR),” says an Equilibra report.
The consultancy firm headed by Martín Rapetti stressed that the operation has two immediate objectives: accentuate the decline in country risk and moderate the financial exchange rate gap. “For MEP and CCL exchange rates to fall, securities quoted in both currencies would have to become more expensive in dollars than in pesos,” estimated in a recent study.
This movement, which would be driven by the state’s purchase of dollar bonds and the increase in repos that the BCRA has implemented concurrentlyit has not been fully transferred to the market. At the end of the week, financial dollars closed higher and dollar bonds were trading an average decline of 2.2%, according to Consultatio.
“International reserves this year is to be increased by US$4,300 million, a goal that already seemed challenging and would be complicated by this week’s announcement. In any case, it is difficult to establish what the overall impact on reserves will be as, in an alternative scenario, too high a gap it might also have made it more difficult to accumulate foreign currency,” Estimated balance.
Consultatio, meanwhile, has identified a “disconnection” between the announced plan and the tools used. To begin with, “the stocks’ spectacular performance required no extra help.” “The target to lower the risk premium was achieved on a market basis and was discontinued after the announcement,” she warned.
Consultatio instead warned that “to commit 1,000 million dollars (equivalent to a sixth of net international reserves or a month and a half of imports) to get the maturities profile off the ground from 2025 onwards while there are significant doubts about the ability to renew the equivalent Of $38 billion of peso debt maturing in 2023 is a controversial order of priority.”
Along the same lines, the director of Econviews Miguel Kiguel questioned the “business” behind Massa’s initiative, which slightly reduced the country risk to 1,876 points. “Why would you want to buy back the debt? The debt that burns the government is debt in pesos, not that of the dollar. There are no deadlines until 2025, the one for the pesos expires almost all of this year”.
On the other hand, Fernando Marull, director of FyMA, highlighted in an analysis of the measures launched by the government to lower the parallel dollar that “they are all typical tools of Plan Llargar”. “And that involves ‘forcing’ variables that are far from equilibrium. Paying higher bond prices, both in local currency (TX24) and dollars (GD30). Or similar, selling parallel dollars cheaper in the market,” he said.
Source: Clarin
