The government continues to work New measures to clarify the financial uncertainty in the face of the first tensions with the opposition over the future of debt in pesos. Se’s goalrgio Massa is to reduce the debt of the Central Bank and refinance the maturities of the Treasury beyond the electionsgoals than for analysts they will not be free and will bring with it risks to the economy, such as a higher debt and inflation.
The expectation is that, as the election approaches, the appetite for the pesos will diminish and pressure on the dollar increases. In this context, the challenge of placing bonds for 2024 and 2025 will be greater. As reported by Clarín, Massa seeks to move forward with a title change to decompress the $6.5 trillion owed in the second quarter. What is being negotiated now is the financial cost, which would be high given that the banks ask for “everything at the market level”.
The difficulties are reflected in the yield on inflation-adjusted bonds maturing in 2024. 75%, anticipating possible changes in the conditions of the bonds. It is one thing that the rate is high and it is another thing that the market sees it triple the currentthat break is in 2024,” said Martín Salvo, CIO of Bind Inversiones.
To cover the commitments and finance the deficit, the Economy has reduced placement terms and raised tariffs. In the last tender it validated a yield of 118% per annum, and the next it will be this Friday. Despite the incentive being higher than the Central Bank’s reference rate (107% per annum) and an expected inflation of 97% yoy, banks still prefer Leliq BCRAs and they lend only to Massa until Augustfearful of a default.
After the deal with the IMF, the Ministry of Economy unsuccessfully seeks the “migration” of private funds in Leliq to Treasury bills. Thus, the stock of Leliq e pass, which the BCRA uses to capture pesos from banks and sterilize them, It already adds nearly $11 billion and represents the monthly interest payments of $700,000 million, today the main factor of emission currency, followed by Central’s purchase of bonds and the soybean dollar.
In the economic group they say that if the Leliqs are reduced, no more pesos will be issued, but economists believe it is “expansive”. “Exchanging Leliq for public bonds is the issue of pesos, disarming Leliq and giving pesos to the banks, and subsequently generating less interest. We need to see how the public sector finances the interest on new bonds, if you leave Central, it fixes nothing“, said Sebastián Menescaldi, deputy director of EcoGo.
Both Treasury debt and that of the BCRA have been in the eye of the storm since Together for Change warned in a statement of the “bomb” that the Frente de Todos would leave to the next administration. Patricia Bullrich should have made it clear to the banks grouped in ADEBA that there would be no re-profiling e Massa came out to deny that the due dates were “unpayable”, at the same time he sent signals on the Leliqs.
“This is a work that will be announced publicly in the coming days with some measures that we will take. We must reduce the Leliq, reduce the amount of pesos circulating in the financial system today and produce a spiral”. said the minister in an interview with CNN. His message, however, has raised doubts in the banks, where they also assure that “reducing the leliq means issuing more pesos”.
To make banks want to lend to the public sector over the long term, the idea is that the central bank give a buy-back guarantee of securities (PUT) in case the institutions want to sell them, an alternative that also has costs. “Reducing Leliq is voluntarism, it means the PUT that he gives to the banks higher potential emission because it is the Central Bank that buys bonds,” said a former BCRA official.
Moreover, debt in pesos must be in tune with the external front. 2.4 trillion pesos are due in April and fewer dollars are expected due to the drought. “At that time, the liquidation of the beginning of a soybean crop very uncertainbut certainly less than last year, where financial expectations could be complicated if the government doesn’t go ahead and do a debt swap,” said Ricardo Delgado, head of Analytica.
Source: Clarin
