The Government renewed for another 10 years – for 2034 – a debt it has with the Central Bank for 7,941 million dollars.
We read it in Joint Resolution no. 7/2024 of the Secretariats of Finance and the Treasury, published today in the Official Journal, according to which “the expansion of the issuance of non-transferable national Treasury bonds in US dollars expires on January 7, 2034” for US$ 7,941,035,741.11 .
That letter was originally issued in 2014 – pay the foreign public debt, using the reserves of the Central Bank – for 10 years, i.e. expiring in January 2024. Now, plus interest, they are renewed for another 10 years.
The Resolution clarifies that this procedure will be applied during 2024. “With Article 4 of Decree 23/2024 it is established that the payments of interest and capital amortization services of non-transferable bills in the portfolio of the Central Bank of the Argentine Republic (BCRA), as well as those issued in favor of said Bank during the year 2024, they will be replaced, upon their maturity, by new public bonds whose conditions will be defined jointly by the Ministry of Finance and the Ministry of Finance, both of the Ministry of Economy”, he specifies. .
As Clarin explained, At the end of 2023 the Central Bank had non-transferable national Treasury securities in its assets for a total of 67.3 billion dollars.
Subsequently, through DNU n. 23/2024, the current government ordered the Central Bank to lend the National Treasury $3.2 billion over 10 years to pay off foreign currency debts. In exchange for obtaining these currencies, the National Treasury will give the BCRA Non-Transferable Letters with a maturity until 2034.
This way, The public debt does not decrease unless there is a change of creditor, as indebtedness to private creditors is replaced by the Central Bank. The BCRA goes from having liquid assets (reserves) to having illiquid assets (Non-transferable letters, which must be kept until they expire (up to 10 years) and then renewed again.
The Non-Transferable Letters were born in January 2006 when Néstor Kirchner paid off his entire debt to the IMF (9,530 million dollars) using the Central Bank’s reserves. In 2010, Cristina Kirchner’s government expanded the use of reserves to pay off public debt to private holders.
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Source: Clarin
