The government placed 751,742 million dollars of debt in pesos on Wednesday in the first auction of the month. In a scenario characterized by acceleration of inflation and renewed expectations of devaluationthe Ministry of Economy took advantage of the demand for coverage and managed to roll over 130% of the maturities of the week, which reached 589,000 million dollars.
In this way the Treasury obtained new funds of just over 162 billion dollars, after the payment of its commitments. The vast majority of pesos raised was thanks to inflation-adjusted bonds (CERs) and the dollar (linked)instruments that have made it possible to extend maturities up to August 2025, with positive rates of up to 2.44%.
“As we said, there were practically no fixed-rate instruments (excluding LELITE for FCI), so 96.8% of what was collected was through instruments that could be modified by CER or DL. As we expected, the BONTE25 (for banks) obtained the highest participation (40.5%)”, says a report by Pedro Siaba Serrate, of the PPI.
The authorities offered a basket of seven bonds, consisting of a liquidity letter through June, a CER bond through August and a letter with the same indexation through September, together with another dollar-linked letter through October. There was also an inflation-adjusted bill in October, a tied dollar bond in September 2024, and a CER bond in August 2025, targeted at banks.
Economics estimated private participation at 70% and that of the public sector at 30%. Meanwhile, analysts perceive that banks and public bodies were fundamental to the result. According to 1816, since last week there have been purchases by the Central Bank from public entities for 230,000 million dollars to finance this Wednesday’s auction.
Although the debt relieves the need to finance itself with a monetary issue, the BCRA has already assisted the Treasury with 440,000 million dollars in May and new transitional advances are not excluded. “We are already feeling the effects of the drought on harvesting and given the lack of adjustments, the fiscal result is likely to be quite weak,” PPI warned.
After placing more than $1 trillion in index-linked bonds at the end of April and a positive rate of up to 5.23% (CER), the Treasury faces maturities of nearly $500 billion on May 29. An estimated 85% of pledges are in private hands, a challenge in a month when inflation could be approaching double-digits, after rising to 8.4% in April.
Source: Clarin
