Surprised by the collapse of bonds, Economy revises its strategy to continue borrowing

“Did you see any particular movement?”, he asked the Ministry of Economy. The consultation surprised the operators of one bank. Not because it is unusual to receive their calls. Martín Guzmán’s team maintains smooth contact with City players. But the collapse of bonds, with falls of up to 15% in two days, has engulfed the market in a climate of nervousness that took the Palacio de Hacienda by surprise.

The answer came this Thursday with 3,200 purchase transactions carried out by the Central Bank for 90,000 million dollars, nearly three times the volume of sales recorded in the last month of inflation-adjusted bonds. In close contact with Economy, Miguel Pesce went to get those bonds and treasury bills (Letes). ANSES also intervened. The target? keep the quotes of instruments that today are mostly in the hands of banks.

“We are working”, they limited themselves to responding in the environment of Guzmán.

That kind of bailout hadn’t happened, according to official dispatches, in the weeks leading up to the presidential election. The measure was one of the recommendations received from the people of Guzmán: “If you are going to pay your debt maturities, go out and buy bonds”they said. In this way, the Central Bank has made it clear that it does not foresee a scenario of default or a delay in payments by the Treasury, as occurred in August 2019.

In an official dispatch, they summed up Wednesday as follows: “It was brutal.” According to the official diagnosis, a series of unfortunate events would have occurred, such as the need for liquidity in major companies, the transfer of fixed-term investors and disarmament in a public body, which started a chain reaction. All eyes were on Banco Nación’s Pellegrini fund, with the sale of 10,000 million dollars, but the institution denied it.

The arrival of winter on the market much earlier than expected clouded the approval of the first audit with the IMF, in which the organization allowed Guzmán to ease his goals for the second quarter. also generated inconvenience in the official offices the rates offered by the minister in the last races, below inflation. That is why they now expect me to raise them in upcoming auctions and shorten deadlines to calm the market.

“Today, clearly the Central Bank and some public bodies have started to act, the next tender is very small and in the month they accrue about $ 500,000 million, half is in public bodies, there is something to recover, this has already happened and in that situation very short bills of 2 or 3 months have been put up for tender until the downpour will pass, next Tuesday they will have no problems ” , said Santiago López Alfaro, President of Securities Patent.

In an inflationary scenario and with an exchange rate trap, Guzmán used index-linked bonds to capture pesos and finance the deficit. But now the disarmament of positions is added other complicationwhich puts more pressure on monetary issue to cover a period of increased tax demands. Hence, analysts agree that the Economy should improve returns for investors, a bet that is not without risk.

“They will have to pay more fee in the tenders, especially in those that need to be renewed, but this is the validation. If it is all tariff, the confirmation effect of the doubts / fears of seeing the CER tenders pay high real rates can end up being counterproductive in the long period. Following the adage “when alms are great, even the most, even the saint distrusts”, said Gabriel Caamaño, of the Consultora Ledesma.