The Government is about to close a new debt exchange for pesos with banks and the public sector. Finance Secretary Eduardo Setti will meet financial institutions and insurance companies this Monday at noon. The meeting in which Minister Sergio Massa would participate will be to close the operation with which we try to reset the deadlines prior to the STEP and to postpone them to 2024 and 2025, during the next administration.
While the Palacio de Hacienda was preparing to negotiate the final details of the agreement, Together for Change broke in this Sunday afternoon with a statement entitled “A new maneuver by the Ministry of Economy will only lead to greater instability”. in the refusal of the exchange. The message surprised the mass, where they interpreted the questions as an attempt to generate a debt “default” in pesos, as happened in 2019.
The Treasury intends to capture the cards that expire between now and the end of June and, in exchange, deliver three inflation-adjusted stocks (CERs). At the request of the banks, there will also be double bonuses, which offer the best result between the CPI and the dollar. It remained to define the conditions of the put (sell option), a sort of “Safe” so that the Central Bank buys the bonds from them in case they want to sell them.
According to EcoGo, up to the end of June, 7.2 billion dollars are accruedhalf of which would be in the hands of the private sector, and nearly $30 billion in all of 2023. Massa seeks to stagger payments, so as to defer some of the debt that matures this year to the first and second half of 2024, and another both in the first quarter of 2025. As for the public sector, a decree will be issued to exchange treasury bills for pesos in the hands of ANSES, BCRA and other entities.
The opposition it had already set its sights in February on debt swaps, dual bonds and high rates. The intervention of the banks has calmed the tensions, but this Sunday they re-emerged with a new alarm on the “serious risks” grant them securities adjustable for inflation and devaluation (“an option that no investor has”) and the possibility of selling them to the Central Bank at any time (“the put”).
For JxC all this would imply “foreign exchange insurance” and “daily” maturities until 2024, in addition to the risk of an “even greater inflationary jump” than the current one and a violation of the BCRA organic charter.
Faced with the declaration of the opposition, massism came out to respond through Sebastián Galmarini, Massa’s brother-in-law and director of Banco Provincia.
“Say it without shame! They want it to explode ???????? not just for electoral speculation against the government. They also do business. They want debts in pesos not paid, the currency devalued and inflation spiraling out of control, while wages lose value. #YaLoHicieorn,” Malena Galmarini’s brother tweeted
The new issues have come to light amid negotiations with the IMF to ease requirements on reserve accumulation by 2023. Sergio Massa’s team, led by Leonardo Madcur and Gabriel Rubinstein, seeks to close the revision of the targets in the next hours until last december and that Agency lowers reserve target to US$2 trillion for this year’s contingencies.
Fund staff had warned in December that the drought could reduce exports and entry of dollars, overheating inflation and “jeopardizing” the deal. For the government, the outlook was worse than expected. net reserves would have reached $7.7 billion by the end of March, a level difficult to achieve with stock below 4.5 billion dollars in the Central Bank, according to private calculations.
To avoid asking for a pardon or resignation, Massa has asked that the impact of drought, the war in Ukraine and bird flu be considered. They encrypt the latest calculations of the Buenos Aires Grain Exchange the loss of exports in US$ 14,000 million.
Economy bet on closing this chapter last week, but negotiations were delayed amid signs of deterioration due to the decline in activity, the loss of reserves and the expectation of 100% annual inflation in February. In that picture, the Fund would have added as a condition the suspension of the repurchase program of reserves with reserves, which helped contain the parallel dollar.
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Source: Clarin
