Economy Minister Martín Guzmán promised it “I will never stop paying the debt in pesos” and thus brought back to the present the famous and traumatic re-profiling of letters in pesos that he had at the end of August 2019 – after the triumph of the Frente de Todos at PASO – his predecessor in office, Hernan Lacunza.

fears him “Something Can Happen With Debt in Pesos” stepped up this week, and that’s partly what explains the collapse of bonds in pesos adjusted by CER. The market has understood that the government is entering a sort of lockdown to continue borrowing to finance the fiscal imbalance, because inflation forces it to raise interest rates and shorten terms. Prices are running at an annual rate of 60% and rising. And it is also established that the government arriving on December 10, 2023 must do something with that debt if it does not want an inflationary bomb product of the mega pesos issue it would have to carry out to pay off the debts.

But it’s not just the pesos debt. dollar debteven if it does not grow – what grows is the debt in pesos – it will be a problem in 2024. That year we will have to start paying the amortization – by returning the principal – of the bonds issued in the swap that was negotiated with private creditors holding government bonds in dollars.

The first amortization installment of the AL 30 Bond, for example, is expected to be no less than July 9, 2024, Independence Day.

If a miracle does not occur, it is very likely that there will be no dollars to pay that fee. The market knows this. know this too today’s bookings are already at the limit. And all of this is reflected in the prices of the swap bonds, which today are almost 50% lower than the prices they showed the day they were delivered to the bondholders who accepted the Argentine proposal. This is why the country risk is once again above 2,000 points, which is double what it was when the swap was closed.

Bond prices show the annual return of those who buy them at current prices it is close to 40%. That fare makes it unimaginable debt rolloveror a new bond loan cannot be placed on July 9, 2024 to refinance the maturity that operates on that day.

Therefore the market assumes 99.99% that there will be a new dollar debt restructuring which today is in the hands of private creditors.

The exchange that Martín Guzmán sold and continues to sell as “the most successful in history” today is a resounding failure. The opposition knows it, Guzmán knows it, the investors know it and the Monetary Fund knows it. This would explain why the IMF is so negligent in monitoring the program it signed with Argentina months ago. The heavy task will be in the hands of the next government.