The Minister of Economy, Luis Caputo launched a debt swap for 54 billion dollars, the equivalent of just over five monetary bases.
The “asset conversion” operation will be carried out. between Monday 11th and Tuesday 12thand corresponds exclusively to Badlar fixed rate and inflation-adjustable (CER) National Treasury securities, official dollar (linked to the dollar) and dual currency (which pays the best performance among the evolutions of the previous options) that have deadlines during 2024.
The intention of the economic team, which will be carried out by the Secretary of Finance, Pablo QuirnoAND postpone as many public debt maturities as possible in the local capital market until December 15, 2025 (after next year’s legislative elections; 30% of the total), 15 December 2026 (another 30%), 15 December 2027 (25%) and 15 December 2028 (15%). This extension will therefore concern the next government or a second mandate of Javier Milei. Eligible securities are only inflation-linked bonds (Boncer).
According to official sources, the idea is to “extend the maturity profile at sustainable rates clear the financial horizon and thus contribute to the stabilization process macroeconomic situation faced since December 11th”.
In fact, postponing payments in agreement with creditors (most of which correspond to the National Public Sector itself, such as Anses, Central Bank -BCRA- and Banco Nación) will mean a lower interest burdenwhich in February led to the return of the fiscal financial deficit.
Furthermore, in the future the Treasury may hold debt auctions exclusively to repurchase bonds from the BCRA, an intra-state transfer of hands that could lead to a contraction of circulating money. Currently the monetary base is equivalent to approximately 10,750 billion dollars, with a decline in real terms of close to 33%.
Excellent meeting with the Minister @LuisCaputoAR. From @el_BID We remain committed to the development of #Argentina and ready to support the government’s priority issues, including tax reforms, social issues and energy. pic.twitter.com/phJr5IMlqF
— Ilan Goldfajn (@igoldfajn) March 9, 2024
The debt exchange operation is one of the non-quantifiable objectives (structural reference point) of the latest revision of agreement with the International Monetary Fund (IMF). Local debt maturities in pesos are equivalent in dollars to more than one agency debt.
Meanwhile, Caputo and Quirno met in Punta Cana with the president of the Inter-American Development Bank (IDB), Ilan Goldfajn, who will support Argentina’s fiscal reforms and send $400 million for “food security.”
Source: Clarin
