One week after Sergio Massa’s requestthe Faculty of Economics of the UBA verification started the deferred debt conversion e in the coming weeks it could issue an opinion. The house of studies, controlled by radicalism, has agreed to evaluate the operation, after being involved in the controversy over the turmoil it has generated in the market and the complaints of the opposition.
“It has already started to do it and it deals with the professors of the faculty”, UBA sources confirm. Massa asked the establishment and the General Audit of the Nation (AGN) for the assessment last week, where in both cases they questioned whether Congress was being overridden. But while the university’s vice-chancellor, Emiliano Yacobitti, accepted the request, the head of the AGN, Jesús Rodríguez, assured that the organization is not an “adviser” to the government.
Massa tries to clarify matters such aswithout going through Parliament. Through a DNU, the government ordered ANSeS and other organizations on March 23 to liquidate their dollar obligations for a double-peso bond (adjusted for inflation and devaluation) due in 2036. The goal was to contain parallel dollars and finance the government deficit in a context of reserve loss and fiscal deterioration.
But a sector of the opposition came out to demand the repeal of the decrees and presented a criminal complaint for “emptying” of the ANSeS Sustainability Guarantee Fund (FGS). with the “forced” sale of dollar bonds in exchange for peso bonds. In this context, Massa asked the UBA and AGN to rule on whether the provision harms or favors the holders of the securities (Globales and Bonares), without assessing the impact on the Treasury.
Meanwhile, the RA Center -a think tank carrying out research in the field of the Faculty of Economics (UBA), chaired by Yacobitti- issued a preliminary opinion on the measure’s “virtues” and “weak points”.. “The swap proposed by the national government would involve a change of creditor as well as a weighting of the public sector portfolio and a dollarization of the private sector,” he said in a document published days ago.
Explain that the financial cost will depend on market expectations.. This means that to the extent that the public maintains a riskier appetite to a greater extent, the implied “cost” of sales will be lower to the state. If, on the other hand, investors reject greater exposure to the Treasury (bond risk), associated with price changes and restructuring risks“the price offered would be depressed, thus increasing the cost of the transaction”.
The document also alludes to the marches and countermarches of the economy. The thing is, On January 18, the debt buyback was announced, which generated a “positive impact” in the price of securities (especially those maturing in 2029 and 2030). “However, the current price has moved down, down 25% from its peak”, explained the RA Center. And, in March, the exchange and sale of bonds was made official. Since then, they have increased by up to 3%.
For the Yacobitti think tank, one of the virtues is that “the government could intervene in the foreign exchange market financial throughout the year to alleviate the turmoil which determine the adverse macroeconomic conditions we are going through, without the use of the Central Bank’s net reserves”, although to stabilize it “it would be necessary for the demand for the dollar-denominated security to validate the excess supply in the peso segment “.
On the contrary, a larger exchange rate gap would damage the ANSeS, as the entities will receive a peso bonus adjusted for inflation or devaluation. “This could have a negative impact on Entity assets if the wholesale exchange rate (A3500) deviates too much from the price of the financial dollar,” the document reads. And he adds: “The change involves a new issue of securities, therefore increasing the level of debt of the national state”.
Finally, “the consolidation of the management of savings banks and of the holdings in the financial assets of various public bodies within the orbit of the national Treasury does not appear entirely inappropriate, in a scenario of gradual decrease in reserves” And he concludes: “Yes, the opportunities and ultimate goals of the measure are questionable, necessarily requiring a comprehensive macroeconomic analysis and not a single asset valuation approach.”
NS
Source: Clarin
