Thanks to the adjustment of peso debt linked to inflation and the dollar and the net increase in liabilities to the IMF, in January the stock of gross public debt amounted to a total amount equivalent to 381,272 million dollars.
«Compared to the previous month, the debt in a normal payment situation increased by the equivalent of US$ 10,622 million, what does it represent monthly growth of 2.88%. The change is due to an increase in foreign currency debt of $3,514 million and an increase in local currency debt by a dollar equivalent amount of $7,108 million,” according to the Secretary of Finance’s Report.
The increase in foreign currency debt is explained by the fact that the International Monetary Fund disbursed $4,707 million as part of the renewal of the agreement with Argentina, of which $1,967 million was used to pay maturities of the January capital. The debt with the IMF increased from 40,899 million dollars to 43,157 million dollars.
After strong liquefaction of peso debt due to the devaluation in December (for the equivalent of 47,307 million dollars, in November the gross debt amounted to the equivalent of 425,294 million dollars), in January it jumped again change in bonds and securities adjustable by the CER (inflation) or linked to the dollar. And to the extent that inflation rises above the change in the official exchange rate, peso debt is valued in dollars should continue to grow, absorbing the liquefaction of December.
Over 90% of peso debt is contracted in CER bonds (which are adjusted for inflation) or linked to the dollar (are adjusted to the official exchange rate), according to the Congressional Budget Office (CPO). This level of debt does not include the debt of the Provinces and the Central Bank.
The Report highlights that “29% of the debt in a normal payment situation is payable in local currency while the remaining 71% is payable in foreign currency”. And that “77% of the gross debt in a normal payment situation corresponds to Treasury securities and bills, 21% to obligations towards external official creditors, 1% corresponds to transitional advances and the remaining 1% to other instruments” .
The Report also underlines this “During the last 12 months, the stock of gross debt in a normal payment situation decreased by the equivalent of 14,516 million dollarsdue to the increase in foreign currency debt by 7,178 million dollars and the decrease in local currency debt by an amount equivalent to 21,694 million dollars”.
The Ministry of Finance clarifies that “due to the recommendations of statistical manuals and based on international definitions, the dollar is used as a unit of account to ensure comparability and standardize statistics. In this way, all figures are expressed in their equivalent in dollars by applying the exchange rate of the last business day of the period to convert into that currency the remaining debts issued and payable in: pesos, special drawing rights (SDRs), euros, yen, etc.”.
Source: Clarin
