Concerned with rebuilding reserves and reducing dollar uncertainty in the face of tensions typical of an election year, the government prepares to resume bond trading suspended for a month. In the coming hours, the UBA will release the opinion that Sergio Massa has requested after the turmoil caused by the financial transaction, and the official expectation is that it will pave the way for the launch of the title auctions.
“Tomorrow or early next week they will finish it,” UBA sources confirm. The audit is carried out by professors of the Faculty of Economics, an institution under the control of the UCR del Capitale, chaired by Emiliano Yacobitti. Massa asked the current vice-rector of the UBA and radical deputy to evaluate the exchange. Also at the General Audit of the Nation (AGN), but its owner Jesús Rodríguez – another radical – has been elusive.
Yacobitti has an excellent relationship with Massa. He is part of Evolución, the space of Martín Lousteau, and was a key element in the approval of the 2023 budget by the government last year. His block of radical deputies from Evolución was the one that gave the quorum to be able to meet and then he voted in favor of the rule that Massa sent to Congress.
That day Yacobitti justified the support of his sector and said that having the Budget “avoids discretion in the distribution of funds”. But in January, in an extension of the Budget, the UBA was awarded a $1,150 million stake.
On 23 March, the Government ordered ANSeS and a hundred public bodies to liquidate their dollar bonds for a double peso bond (adjusted for inflation and devaluation) with a maturity date of 2036. But a sector of the opposition has threatened to repeal the DNU and presented UN criminal complaint for the “emptying” of the ANSeS Sustainability Guarantee Fund (FGS), which the Justice rejected and the opposition presented an appeal this Thursday.
Now, with the sentence looming, Massa is looking reactivate the operation to weigh the debt without going through Congress. His obsession is to contain the exchange rate gap and avoid a devaluation on the eve of the PASO. On Thursday, blue touched $400 and the CCL reached $402, despite the fact that the central bank bought $332 million thanks to the soybean dollar. The rebound brought some relief after strong domestic growth and reserve sales for the year of more than $3,000 million.
Right now, the Ministry of Economy is preparing to implement the regulation of the decree with the exchange mechanism of US$ 4,000 million of bonds under foreign law (Global or GD) and auction securities under local law (Bonars or AL), a scheme which would use the markets regulated by the National Securities Commission (NVC) as intermediaries ). “Regulations are coming out”, an official confirmed.
The CNV sent a signal this week by changing the “parking” of securities used to purchase CCL. The resolution shortened the deadline for settlement of dollar bond transactions under local law from two days to one day and increased the requirement for foreign law bonds from two to three days. The goal is to stimulate the demand for Bonares, a market in which BCRA and ANSeS have greater firepower to intervene in the breach.
According to Ppi, the CNV’s decision “is an additional measure that could accompany the debt program in dollars in the hands of the public sector”. “We are still waiting for the UBA to pronounce on a part of the program (exchange of Globales for DUAL36 to ANSES). Without a doubt this change is a signal that Massa’s team has not completely excluded the Bonares transfer program from the entities public,” he said in a report.
The release of restrictions on the purchase of AL has been one of the points agreed with the bankers, brokerage firm owners and insurance company owners in March. It was during a breakfast at the Palacio de Hacienda, where the forced exchange of bonds was completed. A measure designed for circumvent IMF restrictions to the previous purchase of reserve bonds, with which Massa tried to contain the gap between January and February.
While the Fund has raised no objections to the swap, it said in March that “the market’s initial reaction has been negative: Fitch and S&P downgrade debt Argentina’s foreign currency denominations (CCC- to C and CCC+ to CCC- respectively) and foreign-registered bonds are down 3% since the announcement, reportedly on debt sustainability concerns.
On the market, banks and stockbrokers await the sale of dollar bonds. “Definitely there is some offer from AL trying to contain the CCL, which is quite calm,” said an operator upon arrival in Economy.
The city is also evaluating the “dollar bridge” that Massa operates in Washington. “If it is reached, the pressure will be lower and It remains to be seen if they apply the exchange rate measures on tourism and other items“said economist Jorge Neyro.
Source: Clarin
