Financial Crisis: The President spoke to Guzmán about the strategy to calm the markets

The president spoke this Monday with Martín Guzmán about the situation in the bond marketaccording to official sources. The virtual contact, which also included other officials, was to analyze the measures in place to stop the collapse of the pesos securities, which was accompanied by a day of tension on Wall Street with repercussions on Argentine equities, dollar bonds. and parallel quotes.

Alberto Fernández and the Minister of Economy had already met this Sunday at the Olivos estate, where they would review the scenario opened after the departure of 140,000 million dollars in three days, most of them with inflation-adjusted headlines (CERs) . And today they contacted again in the anteroom of two important tests: Tuesday’s debt auction and the inflation spread May, which would be around 5%.

Guzmán and the head of the Central Bank, Miguel Pesce, visited the Government Palace on Monday for different reasons. The minister was with his counterpart for education, Daniel Filmus, and Fernández to announce a 10% increase in the salaries of Conicet researchers. Pesce, according to official sources, would have spent a few minutes handling paperwork, although other sources assure him that his visit lasted two hours.

BCRA has had to fight on multiple fronts. He again intervened in the purchase of bonds in pesos, which made it possible to improve the value of short bills ahead of this Tuesday’s race. But, due to the deal with the IMF, it has not been able to do the same in the face of the decline in dollar bonds, which investors use to take dollars abroad. In the foreign exchange market, meanwhile, he bought $ 25 million after paying over $ 100 million in energy imports.

Pesce’s acquisition of Treasury Bills was read by the market as a new signal of official decision to keep the value of the letters, now in the hands of banks and investment funds. Along the same lines, on Sunday evening Guzmán went out to rule out the possibility of a debt default or a new profiling, such as the one organized by the administration’s Economy Minister Mauricio Macri, Hernán Lacunza, in 2019.

The economy will look to place $ 14,000 million on a short bond menu this Tuesday (five letters up to six months). Due to the low deadlines, he would have no difficulty in financing himself. The doubts revolve around the auction at the end of the month, when 555,000 million dollars expire, after the setback in April. The market is also closely following the level of rates that the Treasury will offer this Tuesday to acquire pesos on the market.

“Because of the amount they have to renew, which is very small, and the menu of tools they offer, I don’t know if it will give a lot of information. And the big question for the market is whether they can renew the debt. The Ministry of Finance has offered to very short, maximum in December, the only uncertainty is which rate will eventually be validated and the floor cannot be known due to the high volatilitysaid the economist Jorge Neiro.

Between now and the end of the year, Guzmán will have to cover maturities of $ 3.7 billion and raise additional funds of $ 1.2 billion to meet the financial goal with the IMF. The increase in the fiscal deficit adds difficulties: if the Treasury does not obtain sufficient resources, it must enlist the help of the Central Bank, which has accelerated since May. And, on the other hand, there are doubts about the consistency of the program, the quarterly objectives of which the IMF has allowed to relax.