Despite strong criticism from the opposition, Economy Minister Sergio Massa moved forward and managed to sign an agreement on Monday that initiates the fourth debt conversion into pesos since the start of his mandate, in August 2022. A day later, the president of the Association of Banks of Argentina, Claudio Cesario, supported the initiative: “We in our sector understood that it was the most reasonable thing to try to clarify the matter and extend the deadlines”.
“The meeting (yesterday, Monday) was very positive”condemned the banker, who also commented that it was two long months of work.
For his part, Claudio Cesario took the statements of the opposition that this was “a cowardly and ruinous operation”and pointed “do not mix political matters with what this means in economic matters”.
“In economic terms, I think it’s an advantage and it’s well planned”said the president of the body that represents international capital banks with operations in the country who has closed ranks with Sergio Massa on the idea that this operation has the sole intention of clarifying doubts, removing uncertainties and restoring some confidence.
In this sense, he continued: “A cowardly transaction is when you buy at a price that is not the market price”, and according to Cesario this is completely far from that idea.
Continuing with the practical terms of the Government’s proposal, he underlined: “There is talk of a guarantee from the BCRA that this is not the case“why, is that sense, “Central starting prices are not guaranteed or anything like that.”
“This is not insurance as they say,” he warned. And she clarified it like this “I have the ability to sell securities in exchange for cashin an operation that already exists in the Central Bank”.
According to his explanation, what is done through this proposal, “it is selling banks a liquidity option” in case they need it. “You pay for this option,” she said. “Whoever needs it, show up and channel it”, clarified.
Planted on the side of those in favor of the measure advanced by the Government, the head of the ABA stressed that “just as this liquidity option is voluntary and the banks can take it or not. The exchange is also voluntary”.
Subsequently, Cesario preferred to remove from the debate the idea that there weren’t many exit alternatives because if this had not been negotiated, the country would have come close to a cessation of payments. “It’s ugly to talk about default in a country like Argentina which is characterized by being a serial defaulter”, he said. And he clarified: “What I believe is that (if the debt is not renegotiated) the prices would be complicated”.
In this way, then, “they went ahead and tried to renegotiate the best possible price” which was what the market would have required because “closer to the transfer of command the price could have increased”, said the president of the ABA .
The exchange will be open between March 9 and 13, seeking relief from upcoming maturities rising to $18 trillion in 2023, indexed at 80% to the dollar and inflation. Since the last crisis in June, which brought down the prices of CER securities and ended with the resignation of Martín Guzmán, Massa has resorted to three clear payment swaps (with an adherence between 60 and 80 %) and raised rates to 119%, without being able to extend the terms beyond 2023.
In particular, the agreement provides for two baskets of securities with maturities in 2024 and 2025: one with inflated bonds (CERs) and another composed of 60% CERs and 40% dual instruments. The Treasury will absorb instruments maturing in March, April, May and June, half in the hands of the public sector – including the Banco Nación – and the other in the private sector. Of this total, 20% of maturities in the second quarter corresponded to banks, an amount equivalent to $1.4 trillion.
Among other things, Cesario celebrated that public banks are offered conditions similar to those of the private sector. “So everyone has the same options.”he underlined in dialogue with Miter radio.
NS
Source: Clarin
